PFC - SBIN Pair Analysis

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End-of-day divergence (Standardized residual) is 1.76.
Half life of pair is 18.7.
Real time (live) divergence is calculating using following formula:
[sbin_price - (2.05 * pfc_price) - 1.59]/22

(where 1.59 is mean error and 22 is standard error)
Technical strength of PFC is 1.0. (Support & Resistance)
Technical strength of SBIN is 3.0. (Support & Resistance)
Recommendation
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Entry Criterion: Take positions when divergence becomes (+/-)2.5. 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 pfc-sbin.
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

PFC Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
August 31, 2017 118.75 39408000.0 2041.0 2207.0 118.5
September 28, 2017 119.45 1068000.0 49.0 50.0 118.5
Lot size: 6000.0.

SBIN Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
August 31, 2017 284.15 76425000.0 17288.0 19062.0 283.1
September 28, 2017 285.5 2583000.0 653.0 669.0 283.1
October 26, 2017 286.9 294000.0 31.0 34.0 283.1
Lot size: 3000.0.
Click here for backtesting results.

PFC-SBIN Analysis with different time frames and thresholds

Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 102574.909228
Time Frame 6months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 81602.5611476
Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 77119.2311471
Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 65061.2559493
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 59058.9044355