POWERGRID - BPCL Pair Analysis

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End-of-day divergence (Standardized residual) is 1.18.
Half life of pair is 40.6.
Real time (live) divergence is calculating using following formula:
[bpcl_price - (2.1 * powergrid_price) - 1.72]/80.8

(where 1.72 is mean error and 80.8 is standard error)
Technical strength of POWERGRID is 2.6. (Support & Resistance)
Technical strength of BPCL is 2.9. (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 powergrid-bpcl.
Analyse any other pair:

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

Charts

POWERGRID Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
December 26, 2019 186.8 26796000.0 1317.0 1317.0 186.6
January 30, 2020 187.3 792000.0 61.0 61.0 186.6
February 27, 2020 186.0 96000.0 1.0 1.0 186.6
Lot size: 4000.

BPCL Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
December 26, 2019 489.75 26362800.0 5387.0 5387.0 488.5
January 30, 2020 489.85 538200.0 104.0 104.0 488.5
February 27, 2020 485.05 43200.0 5.0 5.0 488.5
Lot size: 1800.
Click here for backtesting results.

POWERGRID-BPCL Analysis with different time frames and thresholds

Time Frame 6months, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 43939.0135417
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2, Total Profit 43743.855096
Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 3, Total Profit 43578.3733007
Time Frame 3months, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 41130.2104641
Time Frame 3months, Entry Threshold 1.5, Stop Loss Threshold 2.5, Total Profit 36872.0323781

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