NMDC - SAIL Pair Analysis

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End-of-day divergence (Standardized residual) is 0.868.
Half life of pair is 15.7.
Real time (live) divergence is calculating using following formula:
[sail_price - (0.44 * nmdc_price) - 0.326]/3.69

(where 0.326 is mean error and 3.69 is standard error)
Technical strength of NMDC is 2.3. (Support & Resistance)
Technical strength of SAIL is 3. (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
April 27, 2017 129.6 28782000.0 1668.0 1783.0 129.15
May 25, 2017 130.15 2748000.0 317.0 334.0 129.15
June 29, 2017 131.4 12000.0 2.0 2.0 129.15
Lot size: 6000.0.

SAIL Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
April 27, 2017 60.6 65316000.0 2037.0 2372.0 60.3
May 25, 2017 60.75 22512000.0 791.0 1120.0 60.3
June 29, 2017 60.95 168000.0 6.0 6.0 60.3
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 47864.1844782
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 44667.6333967
Time Frame 6months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 35661.0601686
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 22408.614359
Time Frame 1month, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 21055.453131