HCLTECH - HDFCBANK Pair Analysis

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End-of-day divergence (Standardized residual) is -0.979.
Half life of pair is 24.6.
Real time (live) divergence is calculating using following formula:
[hdfcbank_price - (2.07 * hcltech_price) - -0.00711]/104

(where -0.00711 is mean error and 104 is standard error)
Technical strength of HCLTECH is 7.7. (Support & Resistance)
Technical strength of HDFCBANK is 7.2. (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 hcltech-hdfcbank.
Analyse any other pair:

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

Charts

HCLTECH Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
July 30, 2020 583.05 20808200.0 2637.0 2637.0 582.25
August 27, 2020 583.75 176400.0 55.0 55.0 582.25
September 24, 2020 585.05 2800.0 0.0 0.0 582.25
Lot size: 1400.

HDFCBANK Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
July 30, 2020 1104.8 43291050.0 19998.0 19998.0 1105.1
August 27, 2020 1102.0 1052700.0 908.0 908.0 1105.1
September 24, 2020 1100.65 60500.0 21.0 21.0 1105.1
Lot size: 500.
Click here for backtesting results.

HCLTECH-HDFCBANK Analysis with different time frames and thresholds

Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 74568.528822
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 61331.1395273
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 46247.8299467
Time Frame 1year, Entry Threshold 2.5, Stop Loss Threshold 3, Total Profit 42994.0537748
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 34924.8777124

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