AAPL vs MSFT: Stock Returns, Risk & Volatility (2026)

Q: Which is a better investment: AAPL or MSFT?

Over the past year, AAPL looks like the better investment: it had higher total return (AAPL +15.9% vs MSFT +2.6%) and a higher Sharpe ratio (AAPL 0.49 vs MSFT 0.07). On risk, MSFT was less volatile (MSFT 26.7% vs AAPL 32.4%), AAPL had a smaller max drawdown (AAPL -28.7% vs MSFT -28.9%), and MSFT had less severe losses on the worst 5% of days (Expected Shortfall of MSFT -3.78% vs AAPL -4.77%).

Written by Gale Finance Team

Reviewed by Sid Kalla CFA Charterholder

Quick answer

Which is a better investment: AAPL or MSFT?

Over the past year, AAPL outperformed (+15.9% vs +2.6%) with a Sharpe ratio of 0.49.

Total Return

AAPL WIN +15.9%

MSFT +2.6%

Sharpe Ratio

AAPL WIN 0.49

MSFT 0.07

Annualized Volatility

AAPL 32.4%

MSFT WIN 26.7%

Max Drawdown

AAPL WIN -28.7%

MSFT -28.9%

Analysis period: 2025-02-27 to 2026-02-25

AAPL Total Return

↑ +15.9%

MSFT Total Return

↑ +2.6%

Relative Performance of AAPL vs MSFT (Normalized to 100)

AAPL MSFT

Normalized to 100 at start date for comparison

Key Takeaways

Total Return: AAPL delivered a +15.9% total return, while MSFT returned +2.6% over the same period. AAPL outperformed on total returns.
Risk-Adjusted Return (Sharpe Ratio): AAPL had a higher Sharpe (0.49 vs 0.07), indicating better risk-adjusted performance.
Volatility (Annualized): AAPL was more volatile, with 32.4% annualized volatility, versus 26.7% for MSFT.
Maximum Drawdown: AAPL's maximum drawdown was -28.7%, while MSFT experienced a deeper drawdown of -28.9%.
Tail Risk (VaR & Expected Shortfall): At the 5% level (daily log returns), AAPL's VaR was -3.28% and its Expected Shortfall (CVaR) was -4.77%; MSFT's were -2.54% and -3.78%. VaR is the cutoff; Expected Shortfall is the average move on the worst days.
Skew & Kurtosis: Skew: AAPL 0.70 vs MSFT -0.09. Excess kurtosis: AAPL 11.93 vs MSFT 10.74. Negative skew leans downside; higher excess kurtosis means fatter tails.
Tail Days & Extremes: 2σ tail days (down/up): AAPL 6/5, MSFT 5/4. Worst day: AAPL -9.25% (2025-04-03) vs MSFT -9.99% (2026-01-29). Best day: AAPL +15.33% (2025-04-09) vs MSFT +10.13% (2025-04-09).
Risk ratios: Sortino - AAPL: 0.75 vs. MSFT: 0.10 , Calmar - AAPL: 0.56 vs. MSFT: 0.09 , Sterling - AAPL: 0.56 vs. MSFT: -0.08 , Treynor - AAPL: 0.12 vs. MSFT: 0.02 , Ulcer Index - AAPL: 10.43% vs. MSFT: 9.27%

Apple vs Microsoft Correlation

0.22 Average Correlation

Apple and Microsoft are weakly correlated over the past year. With a correlation of 0.22, these assets show meaningful independence, offering diversification benefits when held together.

For portfolio construction, this weak correlation suggests that combining AAPL and MSFT could reduce overall portfolio variance. However, correlations can increase during market stress.

Metric	Value
Current (30-day)	0.00
Average (full period)	0.22
Minimum	-0.27
Maximum	0.88

Correlation measures how closely two assets move together. Values near +1 indicate strong co-movement, near 0 indicates independence, and negative values indicate inverse movement.

Investment Comparison

If you invested $10,000 in each asset on February 27, 2025:

AAPL $11,594.93 +15.9%

MSFT $10,260.59 +2.6%

Difference: $1,334.34 (AAPL ahead)

Apple and Microsoft: Risk Analysis

Apple experienced its maximum drawdown of -28.7% from 2025-02-28 to 2025-04-08. It took 164 days to recover.

Microsoft experienced its maximum drawdown of -28.9% from 2025-10-28 to 2026-02-23. It has not yet recovered to its previous peak.

Smaller drawdowns and faster recoveries indicate lower downside risk and greater resilience during market stress.

Sharpe Ratio of AAPL and MSFT

AAPL Sharpe Ratio

↑ 0.49

MSFT Sharpe Ratio

↑ 0.07

Sharpe ratio measures return per unit of risk (volatility). A higher Sharpe indicates better risk-adjusted performance. AAPL had a higher Sharpe (0.49 vs 0.07), indicating better risk-adjusted performance.

A Sharpe above 1.0 is generally considered good, above 2.0 is excellent. Negative Sharpe means the asset underperformed the risk-free rate. Calculated on each asset's full 365-day lookback of available prices and annualized using the asset calendar (365 for crypto, 252 trading days for equities/ETFs/metals).

Sortino Ratio of AAPL and MSFT

AAPL Sortino Ratio

↑ 0.75

MSFT Sortino Ratio

↑ 0.10

Sortino ratio measures return per unit of downside risk. Unlike Sharpe, it only counts downside deviation (returns below the target return). AAPL had better downside-adjusted returns.

A higher Sortino is better. It's useful when upside volatility is common (crypto is the obvious example). Downside deviation: AAPL 21.3% vs MSFT 18.6%. Calculated on each asset's full 365-day lookback of available prices, using the daily risk-free rate as the target return, and annualized using the asset calendar (365 for crypto, 252 trading days for equities/ETFs/metals).

Calmar Ratio of AAPL and MSFT

AAPL Calmar Ratio

↑ 0.56

MSFT Calmar Ratio

↑ 0.09

Calmar ratio compares CAGR to maximum drawdown. Higher Calmar means more return per unit of worst drawdown. AAPL posted the higher Calmar ratio.

Calmar is computed on each asset's full 365-day lookback and uses the max drawdown over that same window.

Sterling Ratio of AAPL and MSFT

AAPL Sterling Ratio

↑ 0.56

MSFT Sterling Ratio

↓ -0.08

Sterling ratio measures excess return per unit of average drawdown (typically drawdowns worse than 10%). AAPL posted the higher Sterling ratio.

Sterling uses average drawdown events deeper than 10% and subtracts the risk-free rate to report excess return.

Treynor Ratio of AAPL and MSFT

AAPL Treynor Ratio

↑ 0.12

MSFT Treynor Ratio

↑ 0.02

Treynor ratio measures excess return per unit of market risk (beta) instead of total volatility. AAPL posted the higher Treynor ratio.

Treynor uses beta vs the S&P 500 (SPY) on shared dates and the average 3-month Treasury rate as the risk-free rate.

Ulcer Index of AAPL and MSFT

AAPL Ulcer Index

10.43%

MSFT Ulcer Index

9.27%

Ulcer Index captures drawdown depth and duration. Lower Ulcer Index means less drawdown pain. MSFT had the lower Ulcer Index (less drawdown pain).

Ulcer Index is computed from each asset's drawdown series over the full lookback window.

Tail Risk & Distribution Shape (1-Year): Apple vs. Microsoft

This section looks at the shape of daily returns, not just the average. Tail stats are computed per asset on its own daily series (crypto includes weekends). We use daily log returns $\ln\left(\frac{P_t}{P_{t-1}}\right)$ so multi-day moves add cleanly.

Definitions: Value at Risk (VaR), Expected Shortfall, skew, kurtosis, and fat tails.

Metric (1-Year)	AAPL	MSFT
5% VaR (daily log return)	-3.28%	-2.54%
5% Expected Shortfall (CVaR)	-4.77% (worst 13 days)	-3.78% (worst 13 days)
Skew	0.70	-0.09
Excess kurtosis	11.93	10.74
2σ tail days (down / up)	6 / 5	5 / 4
Worst day	-9.25% (2025-04-03)	-9.99% (2026-01-29)
Best day	+15.33% (2025-04-09)	+10.13% (2025-04-09)

Downside co-moves (2σ) — 1-Year

Computed on shared dates only (n=249). A “2σ downside move” means a shared-close log return more than 2 standard deviations below that asset’s own mean on this shared-date series. Dates below show simple returns (%) for readability.

When MSFT has a big down day, AAPL also does

40.0%

2 / 5 days

When AAPL has a big down day, MSFT also does

33.3%

2 / 6 days

Show downside tail dates

Dates below are shared-date observations. The “Date” is the period end (close). Tail thresholds are computed on log returns, but the table shows simple returns (%) for readability. Returns are computed from the previous shared close to this one (for example, Friday → Monday includes weekend moves).

Days when both AAPL and MSFT had a big down day (2σ)

Date (interval)	AAPL	MSFT
2025-03-07 → 2025-03-10	-4.85%	-3.34%
2025-04-04	-7.29%	-3.56%

Days when AAPL had a big down day

Date (interval)	AAPL	MSFT
2025-03-07 → 2025-03-10	-4.85%	-3.34%
2025-04-03	-9.25%	-2.36%
2025-04-04	-7.29%	-3.56%
2025-04-08	-4.98%	-0.92%
2025-04-10	-4.24%	-2.34%
2026-02-12	-5.00%	-0.63%

Days when MSFT had a big down day

Date (interval)	AAPL	MSFT
2025-03-07 → 2025-03-10	-4.85%	-3.34%
2025-04-04	-7.29%	-3.56%
2025-04-16	-3.89%	-3.66%
2026-01-29	+0.72%	-9.99%
2026-02-05	-0.21%	-4.95%

Read this as “how ugly the ugly days get”, not as a precise forecast. One-year samples are small, so tail estimates are inherently noisy.

Apple vs Microsoft Volatility (AAPL vs MSFT)

AAPL Volatility

32.4%

±2.04% daily

MSFT Volatility

26.7%

±1.68% daily

Typical daily swing

AAPL

±2.04%

MSFT

±1.68%

Apple's annualized volatility of 32.4% means it typically moves ±2.04% on any given day.

Microsoft's annualized volatility of 26.7% means it typically moves ±1.68% on any given day.

AAPL's higher volatility means a wider path to returns — this can be attractive for tactical, shorter-term exposure, while MSFT's smoother profile may better suit long-term allocators seeking steadier growth.

For comparison, the S&P 500 typically has 15-18% annualized volatility, translating to roughly ±1% daily moves. Higher volatility means larger potential gains but also larger potential losses.

Apple vs Microsoft Performance Over Time

Metric	AAPL	MSFT
30 Days	7.4%	-14.8%
90 Days	-1.2%	-17.5%
180 Days	18.2%	-20.8%
1 Year	15.9%	2.6%

Shorter time frames can show different leaders as market conditions change. Consider your investment horizon when comparing performance.

Full Comparison of Apple vs. Microsoft (1-Year)

Metric	AAPL	MSFT
Total Return	+15.9%	+2.6%
Annualized Volatility	32.4%	26.7%
Sharpe Ratio	0.49	0.07
Sortino Ratio	0.75	0.10
Calmar Ratio	0.56	0.09
Sterling Ratio	0.56	-0.08
Treynor Ratio	0.12	0.02
Ulcer Index	10.43%	9.27%
Max Drawdown	-28.7%	-28.9%
Avg Correlation to S&P 500	0.58	0.56
5% VaR (daily log return)	-3.28%	-2.54%
5% Expected Shortfall (CVaR)	-4.77%	-3.78%
Skew	0.70	-0.09
Excess kurtosis	11.93	10.74
2σ tail days (down / up)	6 / 5	5 / 4

Audit this calculation

Formulas, inputs, and conventions used to compute the metrics on this page.

Inputs & conventions

Shared window for pair metrics: 2025-02-27 → 2026-02-25 (last shared close).
Rolling correlation sample (shared closes): 220 rolling 30-day values (from 249 shared daily returns).
Annualization (days/year): AAPL: 252 days/year; MSFT: 252 days/year.
Risk-free rate: Uses the 3-month U.S. Treasury yield (FRED: DGS3MO), averaged over each asset’s window:

AAPL: 4.20% over 2025-02-27 → 2026-02-25.

MSFT: 4.20% over 2025-02-27 → 2026-02-25.
Volatility drag (rule of thumb): Estimated from annualized volatility (simple returns). For the log-return framing, see Log returns.

AAPL: ≈ -5.2%/yr

MSFT: ≈ -3.6%/yr
Data alignment: No forward fill. Correlation and tail co-moves are computed on shared closes only.
For cross-calendar pairs (e.g., crypto vs stocks), weekend/holiday moves roll into the next shared close.
Return conventions: Volatility/Sharpe/Sortino use simple daily returns. Tail-risk uses daily log returns for distribution stats (but tables show simple returns). Log returns.

Formulas

Daily simple return

r_t = \frac{P_t}{P_{t-1}} - 1

Volatility

\sigma_{ann} = \sigma(r_t)\sqrt{A}

Volatility drag (approx.)

\text{drag} \approx \tfrac{1}{2}\sigma_{ann}^2

Sharpe Ratio

S = \frac{A\,\bar{r} - r_f}{\sigma(r_t)\sqrt{A}}

Sortino Ratio

So = \frac{A\,\bar{r} - r_f}{\sqrt{\mathbb{E}[\min(0,\,r_t - r_f/A)^2]}\,\sqrt{A}}

Maximum Drawdown

MDD = \min_t\left(\frac{P_t}{\max_{s \le t} P_s} - 1\right)

Average Correlation

\rho = \frac{\operatorname{cov}(r^A,\,r^B)}{\sigma_A\,\sigma_B}

Log returns

\ell_t = \ln\left(\frac{P_t}{P_{t-1}}\right)

Notation

$P_t$: Price on day t.
$r_t$: Simple daily return.
$\ell_t$: Log daily return.
$\bar{r}$: Average daily return.
$\sigma(r_t)$: Standard deviation of daily returns.
$A$: Annualization factor (days/year).
$r_f$: Annual risk-free rate.

Apple vs Microsoft: Frequently Asked Questions

Which has higher volatility: AAPL or MSFT?

AAPL showed higher volatility at 32.4% annualized, compared to 26.7% for MSFT Over the past year. Higher volatility means larger price swings in both directions.

Does AAPL provide diversification when held with MSFT?

AAPL and MSFT are weakly correlated over the past year, with an average correlation of 0.22. This weak correlation suggests meaningful diversification benefits when held together.

How bad are the worst 5% days for AAPL vs MSFT?

Over the past year, AAPL's 5% VaR was -3.28% and its 5% Expected Shortfall was -4.77% (worst 13 days). MSFT's were -2.54% and -3.78% (worst 13 days).

Do AAPL and MSFT crash together on bad days?

On shared dates (n=249), when MSFT has a 2σ down day, AAPL also does 40.0% (2/5 days). In the other direction, when AAPL has one, MSFT also does 33.3% (2/6 days).

Which has better risk-adjusted returns: AAPL or MSFT?

AAPL showed better risk-adjusted performance with a Sharpe ratio of 0.49 versus MSFT's 0.07 Over the past year.

Can AAPL and MSFT be combined in a portfolio?

Yes, though allocation sizing matters. Their weak correlation could meaningfully reduce overall portfolio variance. AAPL's higher volatility (32.4%) means even small allocations can materially impact overall portfolio risk.