HCLTECH - HDFCBANK Pair Analysis

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End-of-day divergence (Standardized residual) is -0.181.
Half life of pair is 76.5.
Real time (live) divergence is calculating using following formula:
[hdfcbank_price - (1.72 * hcltech_price) - 27.5]/187

(where 27.5 is mean error and 187 is standard error)
Technical strength of HCLTECH is 6.3. (Support & Resistance)
Technical strength of HDFCBANK is 6.9. (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
November 26, 2020 842.1 6053600.0 19204.0 19204.0 840.5
December 31, 2020 844.8 14727300.0 15048.0 15048.0 840.5
January 28, 2021 846.85 100100.0 66.0 66.0 840.5
Lot size: 1400.

HDFCBANK Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
November 26, 2020 1435.2 14987500.0 38739.0 38739.0 1438.2
December 31, 2020 1434.1 20471550.0 30680.0 30680.0 1438.2
January 28, 2021 1434.45 169950.0 179.0 179.0 1438.2
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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