ITC - AXISBANK Pair Analysis

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End-of-day divergence (Standardized residual) is -2.78.
Half life of pair is 7.47.
Real time (live) divergence is calculating using following formula:
[axisbank_price - (3.19 * itc_price) - -3.5]/85.7

(where -3.5 is mean error and 85.7 is standard error)
Technical strength of ITC is 6.1. (Support & Resistance)
Technical strength of AXISBANK is 3.5. (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 itc-axisbank.
Analyse any other pair:

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

Charts

ITC Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
April 30, 2020 177.8 72369600.0 16154.0 16154.0 177.9
May 28, 2020 176.2 1680000.0 413.0 413.0 177.9
June 25, 2020 175.85 100800.0 32.0 32.0 177.9
Lot size: 2400.

AXISBANK Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
April 30, 2020 327.05 50623200.0 25210.0 25210.0 325.45
May 28, 2020 327.6 634800.0 340.0 340.0 325.45
June 25, 2020 330.25 14400.0 17.0 17.0 325.45
Lot size: 1200.
Click here for backtesting results.

ITC-AXISBANK Analysis with different time frames and thresholds

Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 88105.7360328
Time Frame 1month, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 67063.7585027
Time Frame 3months, Entry Threshold 2.5, Stop Loss Threshold 3, Total Profit 58514.1072113
Time Frame 1month, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 9363.98628793
Time Frame 1year, Entry Threshold 2.5, Stop Loss Threshold 3, Total Profit 7613.09324834

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