NTPC - SUNTV Pair Analysis

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End-of-day divergence (Standardized residual) is 0.849.
Half life of pair is 8.56.
Real time (live) divergence is calculating using following formula:
[suntv_price - (4.05 * ntpc_price) - -0.134]/26.8

(where -0.134 is mean error and 26.8 is standard error)
Technical strength of NTPC is 2.5. (Support & Resistance)
Technical strength of SUNTV is 7.4. (Support & Resistance)
Recommendation
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Entry Criterion: Take positions when divergence becomes (+/-)2.0. 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.
Analyse any other pair:

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

Charts

NTPC Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
July 30, 2020 93.8 61599900.0 1631.0 1631.0 93.4
August 27, 2020 92.0 1008900.0 86.0 86.0 93.4
September 24, 2020 91.85 45600.0 5.0 5.0 93.4
Lot size: 4800.

SUNTV Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
July 30, 2020 402.7 4810500.0 1726.0 1726.0 401.1
August 27, 2020 402.85 48000.0 12.0 12.0 401.1
September 24, 2020 418.6 0.0 0.0 0.0 401.1
Lot size: 1200.
Click here for backtesting results.

NTPC-SUNTV Analysis with different time frames and thresholds

Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 108739.592307
Time Frame 6months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 106982.734932
Time Frame 6months, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 73492.4790983
Time Frame 1year, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 69295.0012156
Time Frame 6months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 61253.9199443

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