TCS - NMDC Pair Analysis

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End-of-day divergence (Standardized residual) is -0.292.
Half life of pair is 13.
Real time (live) divergence is calculating using following formula:
[nmdc_price - (0.0504 * tcs_price) - -0.00489]/9.61

(where -0.00489 is mean error and 9.61 is standard error)
Technical strength of TCS is 7.3. (Support & Resistance)
Technical strength of NMDC is 5. (Support & Resistance)
Recommendation
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Entry Criterion: Take positions when divergence becomes (+/-)2.5. 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-nmdc.
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 2947.7 7231750.0 6375.0 7331.0 2959.3
February 22, 2018 2958.15 550750.0 840.0 1081.0 2959.3
March 28, 2018 2949.0 3750.0 4.0 4.0 2959.3
Lot size: 250.0.

NMDC Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
January 25, 2018 146.8 38418000.0 1415.0 1532.0 146.4
February 22, 2018 146.95 8556000.0 317.0 352.0 146.4
March 28, 2018 146.85 420000.0 6.0 6.0 146.4
Lot size: 6000.0.
Click here for backtesting results.

TCS-NMDC Analysis with different time frames and thresholds

Time Frame 3months, Entry Threshold 2.5, Stop Loss Threshold 3, Total Profit 45025.7864917
Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 16767.3883003
Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 15436.06062
Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 13681.7323261
Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 6991.9678992