DRREDDY - INDUSINDBK Pair Analysis

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End-of-day divergence (Standardized residual) is -2.04.
Half life of pair is 15.2.
Real time (live) divergence is calculating using following formula:
[indusindbk_price - (0.475 * drreddy_price) - 7.58]/158

(where 7.58 is mean error and 158 is standard error)
Technical strength of DRREDDY is 4. (Support & Resistance)
Technical strength of INDUSINDBK is 1.7. (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 2.5 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 drreddy-indusindbk.
Analyse any other pair:

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

Charts

DRREDDY Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
February 27, 2020 3094.25 1639000.0 8260.0 8260.0 3086.9
March 26, 2020 3104.65 1383000.0 4608.0 4608.0 3086.9
April 30, 2020 3116.05 6250.0 18.0 18.0 3086.9
Lot size: 250.

INDUSINDBK Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
February 27, 2020 1154.55 8052400.0 25155.0 25155.0 1153.85
March 26, 2020 1159.4 7350400.0 14760.0 14760.0 1153.85
April 30, 2020 1164.5 98000.0 100.0 100.0 1153.85
Lot size: 400.
Click here for backtesting results.

DRREDDY-INDUSINDBK Analysis with different time frames and thresholds

Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 67143.9012321
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 61516.6747063
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 46486.7104112
Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 39795.2892008
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 39097.281411

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