Why the DAX and not a Eurozone index?


Newbie question here. As the DJIA and the FTSE 100 are used in to gauge the relative strength of the USD and GBP, the DAX is a recommended measure for the EUR.

My question is why isn’t a more weighted Eurozone index used? While looking around I found the Euro Stoxx 50 ( SX5E) a possible alternative. There’s even a broader S&P500 like index in Euro Stoxx (SXXGT).

kind regards, Dims

It’s all about average daily trading volume I believe. DAX has around 70 mln daily volume. SX5E has around 10 mln daily volume.

Can you share the source of your volume data? You probably hit the nail in the head but I had a difficult time verifying the volumetric data for SX5E. Both yahoo fin and investing.com quote ~32m while Bloomberg quotes a whopping 280m!

All 3 sources are consistent with 70m DAX volume though.

Both appear to be strongly correlated. Might not make a difference using one over the other.

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Because Germany is the biggest Eurozone economy so its performance is largely determined by growth, consumer and business sentiment in key members. That’s why there is so much focus on what’s happening in DAX

Cool chart. Where did you pull this from?

I did it in Excel. Downloaded data for the indices from www.investing.com I believe. Here’s the data I worked with if you’re interested. EUR data.xlsx (142.9 KB)

I’m cheap and use WPS office. Don’t know if the pivot chart will look the exact same if you open it in Excel.

Haha, no I’m the same way. Thanks for sharing and explaining!

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