SHREECEM - GRASIM Pair Analysis

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End-of-day divergence (Standardized residual) is 1.53.
Half life of pair is 1.61.
Real time (live) divergence is calculating using following formula:
[grasim_price - (0.0603 * shreecem_price) - 1.02]/29.4

(where 1.02 is mean error and 29.4 is standard error)
Technical strength of SHREECEM is 3. (Support & Resistance)
Technical strength of GRASIM is 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 2.5 or less than -2.5. 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 shreecem-grasim.
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

SHREECEM Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
June 29, 2017 17769.0 30600.0 190.0 202.0 17629.3
Lot size: 50.0.

GRASIM Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
June 29, 2017 1114.25 5218500.0 2247.0 2389.0 1109.4
July 27, 2017 1111.65 2250.0 1.0 1.0 1109.4
Lot size: 750.0.
Click here for backtesting results.

SHREECEM-GRASIM Analysis with different time frames and thresholds

Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 67756.8642004
Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 56148.7272626
Time Frame 1month, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 20755.7325861
Time Frame 3months, Entry Threshold 2.5, Stop Loss Threshold 3, Total Profit 10522.4763361
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 2547.79943472