NMDC - IRB Pair Analysis

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End-of-day divergence (Standardized residual) is 2.02.
Half life of pair is 15.9.
Real time (live) divergence is calculating using following formula:
[irb_price - (1.79 * nmdc_price) - 0.996]/19.9

(where 0.996 is mean error and 19.9 is standard error)
Technical strength of NMDC is 5.1. (Support & Resistance)
Technical strength of IRB is 7.3. (Support & Resistance)
Recommendation
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Entry Criterion: Take positions when divergence becomes (+/-)2.0. And exit positions when divergence becomes (+/-)0.0.
Stop Loss: Put your stop loss when divergence becomes more than 3.0 or less than -3.0. 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 nmdc-irb.
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

NMDC Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
April 26, 2018 124.35 23334000.0 1542.0 2055.0 124.5
May 31, 2018 124.95 6222000.0 584.0 1018.0 124.5
June 28, 2018 125.0 162000.0 22.0 22.0 124.5
Lot size: 6000.0.

IRB Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
April 26, 2018 265.15 14212500.0 4520.0 5677.0 264.45
May 31, 2018 266.55 4002500.0 1321.0 2129.0 264.45
Lot size: 2500.0.
Click here for backtesting results.

NMDC-IRB Analysis with different time frames and thresholds

Time Frame 1year, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 30921.729129
Time Frame 1year, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 1764.12541897