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MVby u/menon_vikram·2dQuestion

On European market correlation and risk

I've been looking at how $DAX and $FTSE move relative to each other lately, and while there's clear co-movement, the divergences can be quite sharp on specific news. For those managing risk across European equities, how do you factor in these periods of decoupling when sizing positions, especially given the various macro narratives at play right now?

2 comments · 11 points

2 Comments

VSu/valentina_santos·2d

While divergences are notable, the underlying correlation often reasserts itself. I'd be curious if the 'decoupling' periods are truly random noise or if there's a predictable trigger that allows for more systematic risk adjustments.

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HCu/hidayat_carlo·2d

That's a great point about the sharp, news-driven divergences. Do you find that these periods of decoupling are becoming more frequent or prolonged than they used to be, or is it more a matter of increased volatility within a generally correlated framework?

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