This year the stock market has told us that Germany is over exposed to Russia versus the rest of the Eurozone. Over 1 year DAX has underperformed SX5E (total return) by 4.00%
As the graph shows below, the DAX has underperformed SX5E (total return) a first time after the war was declared. After recovering, it started to underperform in June when concerns over energy supplies for winter 2022-2023 started to emerge. The current 1-year underperformance of 4.00% has been fully realised since mid-June.
The option market is telling us the same. As in the days following the start if the war in Ukraine, there is now a strong demand of DAX vol over SX5E vol. Currently the 3-month DAX is 1.4 vol points above the 3-month SX5E (see graph below). It seems that traders are positioning for a winter more challenging and volatile for German equities than for the rest of the Eurozone.