NIFTY - CASTROLIND Pair Analysis

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End-of-day divergence (Standardized residual) is -1.04.
Half life of pair is 45.7.
Real time (live) divergence is calculating using following formula:
[castrolind_price - (0.0384 * nifty_price) - 0.0285]/13.9

(where 0.0285 is mean error and 13.9 is standard error)
Technical strength of NIFTY is 7.7. (Support & Resistance)
Technical strength of CASTROLIND is 5.3. (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
October 26, 2017 10189.7 24397650.0 76455.0 153030.0 10184.85
November 30, 2017 10224.25 4672575.0 23488.0 52284.0 10184.85
December 28, 2017 10256.1 497025.0 1241.0 1728.0 10184.85
Lot size: 75.0.

CASTROLIND Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
October 26, 2017 377.75 9258200.0 1342.0 2341.0 376.8
November 30, 2017 379.65 2072000.0 747.0 1698.0 376.8
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 40657.7302143
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 33844.3333857
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 33122.5845845
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 29994.3051665
Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 19589.9196146