BAJFINANCE - KOTAKBANK Pair Analysis

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End-of-day divergence (Standardized residual) is 0.862.
Half life of pair is 13.7.
Real time (live) divergence is calculating using following formula:
[kotakbank_price - (0.423 * bajfinance_price) - 41.4]/191

(where 41.4 is mean error and 191 is standard error)
Technical strength of BAJFINANCE is 3.12. (Support & Resistance)
Technical strength of KOTAKBANK is 1.7. (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 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.
Click here to see all recommendations for pair bajfinance-kotakbank.
Analyse any other pair:

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

Charts

BAJFINANCE Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
April 30, 2020 2217.85 4546500.0 24887.0 24887.0 2207.5
May 28, 2020 2225.55 76000.0 252.0 252.0 2207.5
June 25, 2020 2310.55 2500.0 3.0 3.0 2207.5
Lot size: 250.

KOTAKBANK Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
April 30, 2020 1144.15 8976400.0 27802.0 27802.0 1140.85
May 28, 2020 1141.85 219600.0 576.0 576.0 1140.85
June 25, 2020 1111.2 800.0 1.0 1.0 1140.85
Lot size: 400.
Click here for backtesting results.

BAJFINANCE-KOTAKBANK Analysis with different time frames and thresholds

Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 98948.6319627
Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 98561.0497601
Time Frame 1month, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 40693.5587447
Time Frame 6months, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 30362.327871
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 29614.6211089

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