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Published on 29/06/2020 2:30:32 PM | Source: Motilal Oswal Financial Services Ltd

Pair Trade : Buy HDFC & Sell HDFC Bank - Motilal Oswal

Posted in Broking Firm Views - Short Term Report| #HDFC Ltd. #HDFC Bank #Trading Report #Motilal Oswal Financial Services Ltd

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PAIR TRADE : BUY HDFC & SELL HDFC BANK

Pair Trade Strategy

Leg 1 : BUY HDFC 1 LOT (LOT SIZE = 300) 30-JULY-20 @ 1730 AND 27 SHARES IN CASH

Leg 2 : SELL HDFCBANK 1 LOT (LOT SIZE = 550) 30-JULY-20 @ 1030

Tenure : 2-3 weeks

Target Profit : 7.00%

Stop Loss : 3.50%

Margin : 3,30,000

Pair Trade Strategy 29th June 2020 This pair has 93% correlation over the last few months post its excorporate action. Pair (HDFC/HDFCBANK) has trade lot ratio of 0.91 with price ratio of 1.68. As per statistical data pair is expected to now move towards its mean of around 1.85. The ratio is taking resistance around 2 from the last 1 year. It has been moving in a range of 1.60 – 2. Currently its hovering near to the lower band of the ratio and thus, provides a pair trade opportunity for coming days

 

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