TCS - CIPLA Pair Analysis

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End-of-day divergence (Standardized residual) is 1.02.
Half life of pair is 2.46.
Real time (live) divergence is calculating using following formula:
[cipla_price - (0.23 * tcs_price) - 0.0225]/14.4

(where 0.0225 is mean error and 14.4 is standard error)
Technical strength of TCS is 7.7. (Support & Resistance)
Technical strength of CIPLA is 8.1. (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 2.0 or less than -2.0. 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-cipla.
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
October 26, 2017 2583.55 6936250.0 603.0 634.0 2583.9
November 30, 2017 2594.35 179250.0 27.0 29.0 2583.9
Lot size: 250.0.

CIPLA Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
October 26, 2017 608.95 7428000.0 331.0 352.0 607.8
November 30, 2017 612.2 390000.0 22.0 23.0 607.8
Lot size: 1000.0.
Click here for backtesting results.

TCS-CIPLA Analysis with different time frames and thresholds

Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 58967.0122833
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 50146.2124323
Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 39256.0438101
Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 37576.1260493
Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 36564.8259977