SUNPHARMA - LUPIN Pair Analysis

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End-of-day divergence (Standardized residual) is -0.278.
Half life of pair is 61.1.
Real time (live) divergence is calculating using following formula:
[lupin_price - (1.87 * sunpharma_price) - -10.5]/175

(where -10.5 is mean error and 175 is standard error)
Technical strength of SUNPHARMA is 2. (Support & Resistance)
Technical strength of LUPIN is 2.9. (Support & Resistance)
Recommendation
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Entry Criterion: Take positions when divergence becomes (+/-)2. And exit positions when divergence becomes (+/-)0.
Stop Loss: Put your stop loss when divergence becomes more than 2.5 or less than -2.5. 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.
Analyse any other pair:

How to choose pairs?
Choose stocks from same sector/subsector.
Use stock with large market capitalization as first stock.

Charts

SUNPHARMA Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
February 27, 2020 405.7 55143750.0 18238.0 18238.0 404.95
March 26, 2020 407.55 17037500.0 12738.0 12738.0 404.95
April 30, 2020 409.5 48750.0 11.0 11.0 404.95
Lot size: 1250.

LUPIN Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
February 27, 2020 701.6 8150100.0 2861.0 2861.0 699.6
March 26, 2020 703.6 1073800.0 1134.0 1134.0 699.6
April 30, 2020 706.0 3500.0 1.0 1.0 699.6
Lot size: 700.
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