HCLTECH - KOTAKBANK Pair Analysis

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End-of-day divergence (Standardized residual) is -2.65.
Half life of pair is 19.7.
Real time (live) divergence is calculating using following formula:
[kotakbank_price - (2.64 * hcltech_price) - 8]/186

(where 8 is mean error and 186 is standard error)
Technical strength of HCLTECH is 6.1. (Support & Resistance)
Technical strength of KOTAKBANK is 5. (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-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

HCLTECH Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
August 27, 2020 691.8 16545200.0 5866.0 5866.0 688.4
September 24, 2020 692.4 100800.0 53.0 53.0 688.4
October 29, 2020 688.85 4200.0 3.0 3.0 688.4
Lot size: 1400.

KOTAKBANK Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
August 27, 2020 1332.9 8634000.0 12076.0 12076.0 1334.2
September 24, 2020 1330.85 86000.0 230.0 230.0 1334.2
October 29, 2020 1331.25 5200.0 4.0 4.0 1334.2
Lot size: 400.
Click here for backtesting results.

HCLTECH-KOTAKBANK Analysis with different time frames and thresholds

Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 62220.5910192
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 56513.0789719
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 54292.3929873
Time Frame 1year, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 52518.0517385
Time Frame 1year, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 48916.5214547

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