TCS - ASIANPAINT Pair Analysis

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End-of-day divergence (Standardized residual) is -0.957.
Half life of pair is 11.8.
Real time (live) divergence is calculating using following formula:
[asianpaint_price - (0.459 * tcs_price) - 1.68]/53.6

(where 1.68 is mean error and 53.6 is standard error)
Technical strength of TCS is 4.0. (Support & Resistance)
Technical strength of ASIANPAINT is 1.9. (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-asianpaint.
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
December 28, 2017 2556.1 6898500.0 5317.0 5953.0 2545.6
January 25, 2018 2561.45 86250.0 129.0 131.0 2545.6
February 22, 2018 2566.6 1500.0 2.0 2.0 2545.6
Lot size: 250.0.

ASIANPAINT Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
December 28, 2017 1123.45 3659400.0 1452.0 1496.0 1118.7
January 25, 2018 1128.6 76800.0 50.0 60.0 1118.7
Lot size: 600.0.
Click here for backtesting results.

TCS-ASIANPAINT Analysis with different time frames and thresholds

Time Frame 6months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 76022.5427039
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 72481.0530986
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 64538.7661389
Time Frame 6months, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 61747.48855
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 35480.2924368