BHARATFORG - APOLLOHOSP Pair Analysis

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End-of-day divergence (Standardized residual) is -3.16.
Half life of pair is 1.25.
Real time (live) divergence is calculating using following formula:
[apollohosp_price - (4.05 * bharatforg_price) - 3.87]/99.5

(where 3.87 is mean error and 99.5 is standard error)
Technical strength of BHARATFORG is 7.1. (Support & Resistance)
Technical strength of APOLLOHOSP is 8.5. (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.
Analyse any other pair:

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

Charts

BHARATFORG Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
August 27, 2020 500.85 6733500.0 20100.0 20100.0 502.9
September 24, 2020 501.25 217500.0 391.0 391.0 502.9
October 29, 2020 467.15 1500.0 1.0 1.0 502.9
Lot size: 1300.

APOLLOHOSP Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
August 27, 2020 1726.15 1031500.0 2802.0 2802.0 1725.1
September 24, 2020 1723.25 62500.0 53.0 53.0 1725.1
October 29, 2020 1720.0 10000.0 0.0 0.0 1725.1
Lot size: 500.
Click here for backtesting results.

BHARATFORG-APOLLOHOSP Analysis with different time frames and thresholds

Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 35117.0763529
Time Frame 1month, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 23557.9758257
Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 10732.61379

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