Very poor diversification
Overlapping area represents the amount of risk that can be diversified away by holding ATX and DAX in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on DAX and ATX is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ATX are associated (or correlated) with DAX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAX has no effect on the direction of ATX i.e. ATX and DAX go up and down completely randomly.