We present an analysis of the electronic confinement properties of self-assembled islands forming via silicon and germanium co-deposition in molecular beam epitaxy. This approach allows the fabrication of laterally self-ordered three dimensional islands in the Stranski-Krastanow growth mode. Using a systematic structural analysis, we derive a realistic fit-parameter free island model for band structure simulations. A comparison between these band structure simulations and photoluminescence spectroscopy shows that such islands have a significant three dimensional spatial electron-hole wave function overlap. In addition, we show that this spatial wave function overlap overcompensates a weak wave function spreading in k-space. (C) 2013 AIP Publishing LLC.