NMDC - SAIL Pair Analysis

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End-of-day divergence (Standardized residual) is 0.0302.
Half life of pair is 15.3.
Real time (live) divergence is calculating using following formula:
[sail_price - (0.436 * nmdc_price) - 0.345]/3.43

(where 0.345 is mean error and 3.43 is standard error)
Technical strength of NMDC is 3. (Support & Resistance)
Technical strength of SAIL is 5. (Support & Resistance)
Recommendation
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Entry Criterion: Take positions when divergence becomes (+/-)2.5. And exit positions when divergence becomes (+/-)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-sail.
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
February 23, 2017 136.4 17166000.0 945.0 1007.0 136.2
March 30, 2017 136.6 4554000.0 321.0 348.0 136.2
April 27, 2017 136.5 48000.0 8.0 8.0 136.2
Lot size: 6000.0.

SAIL Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
February 23, 2017 60.1 49860000.0 2274.0 2791.0 59.85
March 30, 2017 59.95 15216000.0 549.0 867.0 59.85
April 27, 2017 59.9 324000.0 3.0 3.0 59.85
Lot size: 12000.0.
Click here for backtesting results.

NMDC-SAIL Analysis with different time frames and thresholds

Time Frame 6months, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 46790.8671394
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 36869.9635141
Time Frame 6months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 33228.1605989
Time Frame 6months, Entry Threshold 2.5, Stop Loss Threshold 3, Total Profit 25907.3061169
Time Frame 1month, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 25088.0554941