SUNPHARMA - UPL Pair Analysis

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End-of-day divergence (Standardized residual) is 1.35.
Half life of pair is 11.4.
Real time (live) divergence is calculating using following formula:
[upl_price - (1.3 * sunpharma_price) - 1.18]/41.5

(where 1.18 is mean error and 41.5 is standard error)
Technical strength of SUNPHARMA is 2. (Support & Resistance)
Technical strength of UPL is 6.3. (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.
Click here to see all recommendations for pair sunpharma-upl.
Analyse any other pair:

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

Charts

SUNPHARMA Futures - NSE
Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
February 27, 2020 405.7 55143750.0 18238.0 18238.0 404.95
March 26, 2020 407.55 17037500.0 12738.0 12738.0 404.95
April 30, 2020 409.5 48750.0 11.0 11.0 404.95
Lot size: 1250.

UPL Futures - NSE

Expiry Date Close Price Open Interest Number of Trades No of Contracts Underlying Closing Price
February 27, 2020 584.6 13278600.0 3560.0 3560.0 584.35
March 26, 2020 586.9 1152000.0 1051.0 1051.0 584.35
April 30, 2020 589.2 11700.0 9.0 9.0 584.35
Lot size: 900.
Click here for backtesting results.

SUNPHARMA-UPL Analysis with different time frames and thresholds

Time Frame 1month, Entry Threshold 2, Stop Loss Threshold 2.5, Total Profit 22098.7255666

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