Engine internals

Tail-dependence (copula)

In plain English

How often a pattern's factors actually move together in extreme conditions, not just on average.

How it works

Schmidt-Stadtmüller 2006: an empirical estimator for whether two factors co-move in their tails (extreme upper or lower decile). λ ≥ 0.25 means the factors historically co-move when the market is stressed — structural pattern, not coincidence. λ < 0.10 means they're independent in tails — the apparent setup is probably random alignment. We use this to dampen pattern confidence when tail-alignment is weak.

Where you see this in Framler
Tail badge on confluence pattern banners (e.g. "✓ tail 0.32" green, "◇ tail 0.05" grey).
Primary citation
Schmidt-Stadtmüller 2006, Non-parametric tail-dependence estimator

Related — Engine internals

Framler score (composite)Verdict (BUY/MIXED/SELL)Forward return (expected)Market regime (BOCPD)Conformal prediction intervalKalman DLM (dynamic factor weights)

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Tail-dependence (copula) — Framler glossary | Framler