NIFTY - CASTROLIND Pair Analysis

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End-of-day divergence (Standardized residual) is -0.985.
Half life of pair is 3.6.
Real time (live) divergence is calculating using following formula:
[castrolind_price - (0.0468 * nifty_price) - 0.083]/7.49

(where 0.083 is mean error and 7.49 is standard error)
Technical strength of NIFTY is 6.7. (Support & Resistance)
Technical strength of CASTROLIND is 6.5. (Support & Resistance)
Recommendation
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Entry Criterion: Take positions when divergence becomes (+/-)1.5. And exit positions when divergence becomes (+/-)0.0.
Stop Loss: Put your stop loss when divergence becomes more than 2.0 or less than -2.0. We suggest you always use stop losses.
Note: When you trade in futures, keep in mind the expiry date of futures as divergence might not end before expiry date.
Click here to see all recommendations for pair nifty-castrolind.
Analyse any other pair:

How to choose pairs?
Choose stocks from same sector/subsector.
Use stock with large market capitalization as first stock.
Here is a list of pairs chosen analytically.

Charts

NIFTY Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
March 30, 2017 9067.95 21382200.0 69958.0 171644.0 9045.2
April 27, 2017 9101.55 10119450.0 27066.0 85700.0 9045.2
May 25, 2017 9124.8 2508225.0 1229.0 2139.0 9045.2
Lot size: 75.0.

CASTROLIND Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
March 30, 2017 417.45 5464200.0 685.0 2231.0 416.3
April 27, 2017 419.6 4019400.0 441.0 1988.0 416.3
May 25, 2017 418.85 16800.0 3.0 3.0 416.3
Lot size: 1400.0.
Click here for backtesting results.

NIFTY-CASTROLIND Analysis with different time frames and thresholds

Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 40652.9170394
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 33839.5202108
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 31215.3107459
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 28088.9726982
Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 19589.9196146