HEROMOTOCO - OIL Pair Analysis

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End-of-day divergence (Standardized residual) is 1.41.
Half life of pair is 8.84.
Real time (live) divergence is calculating using following formula:
[oil_price - (0.0597 * heromotoco_price) - 0.293]/10.5

(where 0.293 is mean error and 10.5 is standard error)
Technical strength of HEROMOTOCO is 1.7. (Support & Resistance)
Technical strength of OIL is 3.3. (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 heromotoco-oil.
Analyse any other pair:

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

Charts

HEROMOTOCO Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
December 26, 2019 2366.65 3843400.0 4972.0 4972.0 2362.2
January 30, 2020 2379.6 57200.0 289.0 289.0 2362.2
February 27, 2020 2358.25 13000.0 35.0 35.0 2362.2
Lot size: 200.

OIL Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
December 26, 2019 155.7 4986333.0 452.0 452.0 156.2
January 30, 2020 155.0 84975.0 4.0 4.0 156.2
February 27, 2020 154.6 16995.0 0.0 0.0 156.2
Lot size: 3399.
Click here for backtesting results.

HEROMOTOCO-OIL Analysis with different time frames and thresholds

Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 32375.5769365
Time Frame 1year, Entry Threshold 2.5, Stop Loss Threshold 3, Total Profit 10012.9186288
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 8981.54003943
Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 4026.09649555
Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 1246.53134227

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