TCS - AMBUJACEM Pair Analysis

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End-of-day divergence (Standardized residual) is 0.476.
Half life of pair is 24.2.
Real time (live) divergence is calculating using following formula:
[ambujacem_price - (0.105 * tcs_price) - 0.16]/16.9

(where 0.16 is mean error and 16.9 is standard error)
Technical strength of TCS is 7.3. (Support & Resistance)
Technical strength of AMBUJACEM is 4.0. (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
September 28, 2017 2512.25 6099250.0 4965.0 5384.0 2503.6
October 26, 2017 2518.9 196000.0 696.0 751.0 2503.6
November 30, 2017 2528.5 9250.0 29.0 30.0 2503.6
Lot size: 250.0.

AMBUJACEM Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
September 28, 2017 269.25 12145000.0 1647.0 1800.0 269.9
October 26, 2017 270.65 480000.0 217.0 236.0 269.9
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 64963.6742961
Time Frame 6months, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 61694.463074
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 30073.7585871
Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 26879.2887685
Time Frame 1year, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 26402.6362772