TCS - AMBUJACEM Pair Analysis

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End-of-day divergence (Standardized residual) is -2.08.
Half life of pair is 10.5.
Real time (live) divergence is calculating using following formula:
[ambujacem_price - (0.106 * tcs_price) - 0.455]/13.6

(where 0.455 is mean error and 13.6 is standard error)
Technical strength of TCS is 6.7. (Support & Resistance)
Technical strength of AMBUJACEM is 7. (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 tcs-ambujacem.
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

TCS Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
January 25, 2018 2873.6 7159500.0 13044.0 15284.0 2888.95
February 22, 2018 2884.25 311000.0 748.0 1068.0 2888.95
March 28, 2018 2884.3 2500.0 4.0 5.0 2888.95
Lot size: 250.0.

AMBUJACEM Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
January 25, 2018 276.65 13697500.0 1513.0 1559.0 277.15
February 22, 2018 276.6 327500.0 84.0 84.0 277.15
Lot size: 2500.0.
Click here for backtesting results.

TCS-AMBUJACEM Analysis with different time frames and thresholds

Time Frame 6months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 42651.1350445
Time Frame 6months, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 39381.9238225
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 26035.135625
Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 25333.0608917
Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 23482.7740093