Tata Consultancy Services vs Microsoft (TCS vs MSFT) 2026: Stock Returns, Risk & Volatility

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

Over the past year, MSFT looks like the better investment: it had higher total return (MSFT +1.5% vs TCS -27.5%) and a higher Sharpe ratio (MSFT 0.10 vs TCS -1.08). On risk, TCS was less volatile (TCS 30.6% vs MSFT 34.2%), MSFT had a smaller max drawdown (MSFT -34.8% vs TCS -41.9%), and MSFT had less severe losses on the worst 5% of days (Expected Shortfall of MSFT -4.37% vs TCS -5.02%).

Written by Gale Finance Team

Reviewed by Sid Kalla CFA Charterholder

Returns shown in USD.

Quick answer

Which is a better investment: TCS or MSFT?

Over the past year, MSFT outperformed TCS. MSFT returned +1.5% compared with TCS’s -27.5%. MSFT had the better risk-adjusted return, with a Sharpe ratio of 0.10 versus TCS’s -1.08. TCS was less volatile than MSFT, but MSFT had a smaller max drawdown than TCS.

Total Return

TCS -27.5%

MSFT +1.5%

Sharpe Ratio

TCS -1.08

MSFT 0.10

Annualized Volatility

TCS 30.6%

MSFT 34.2%

Max Drawdown

TCS -41.9%

MSFT -34.8%

Metric winners: Total Return: MSFT; Sharpe Ratio: MSFT; Annualized Volatility: TCS (less volatile); Max Drawdown: MSFT (smaller drawdown).

TCS Total Return

↓ -27.5%

MSFT Total Return

↑ +1.5%

Relative Performance of TCS vs MSFT (Normalized to 100)

TCS MSFT

Normalized to 100 at start date for comparison

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Key Takeaways

Total Return: TCS delivered a -27.5% total return, while MSFT returned +1.5% over the same period. MSFT outperformed on total returns.
Risk-Adjusted Return (Sharpe Ratio): TCS had a negative Sharpe (-1.08) while MSFT was positive (0.10), indicating MSFT had meaningfully better risk-adjusted performance in this period.
Volatility (Annualized): MSFT was more volatile, with 34.2% annualized volatility, versus 30.6% for TCS.
Maximum Drawdown: MSFT's maximum drawdown was -34.8%, while TCS experienced a deeper drawdown of -41.9%.
Tail Risk (VaR & Expected Shortfall): At the 5% level (daily log returns), TCS's VaR was -3.65% and its Expected Shortfall (CVaR) was -5.02%; MSFT's were -3.23% and -4.37%. VaR is the cutoff; Expected Shortfall is the average move on the worst days.
Skew & Kurtosis: Skew: TCS -0.45 vs MSFT 1.06. Excess kurtosis: TCS 2.54 vs MSFT 11.25. Negative skew leans downside; higher excess kurtosis means fatter tails.
Tail Days & Extremes: 2σ tail days (down/up): TCS 8/6, MSFT 3/5. Worst day: TCS -8.11% (2026-06-03) vs MSFT -9.99% (2026-01-29). Best day: TCS +5.90% (2026-06-02) vs MSFT +15.51% (2026-07-30).
Risk ratios: Sortino - TCS: -1.42 vs. MSFT: 0.16 , Calmar - TCS: -0.66 vs. MSFT: 0.04 , Sterling - TCS: -0.75 vs. MSFT: -0.06 , Treynor - TCS: -1.45 vs. MSFT: 0.03 , Ulcer Index - TCS: 23.25% vs. MSFT: 19.47%

Investment Comparison

If you invested $10,000 in each asset on August 29, 2025:

TCS $7,254.92 -27.5%

MSFT $10,154.27 +1.5%

Difference: $2,899.35 (MSFT ahead)

Tata Consultancy Services vs Microsoft Performance Over Time

Metric	TCS	MSFT
30 Days	-4.1%	31.5%
90 Days	4.9%	14.1%
180 Days	-13.7%	30.8%
1 Year	-27.5%	1.5%

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

Tata Consultancy Services vs Microsoft Correlation

Average Correlation

weakly correlated

0.08

Current (30-day) 0.10

30-day rolling range -0.27 to +0.40

Tata Consultancy Services and Microsoft are weakly correlated over the past year. With a correlation of 0.08, these assets show meaningful independence, offering diversification benefits when held together.

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

Metric	Value
Current (30-day)	0.10
Average (full period)	0.08
Minimum (30-day rolling)	-0.27
Maximum (30-day rolling)	0.40

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. Current, minimum, and maximum figures are 30-day rolling correlations on shared daily returns.

Drawdown

Maximum Drawdown

TCS

-41.9%

MSFT

-34.8%

Tata Consultancy Services experienced its maximum drawdown of -41.9% from 2025-12-22 to 2026-07-01. It has not yet recovered to its previous peak.

Microsoft experienced its maximum drawdown of -34.8% from 2025-10-28 to 2026-06-25. It has not yet recovered to its previous peak.

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

Tata Consultancy Services vs Microsoft Volatility (TCS vs MSFT)

TCS Volatility

30.6%

±1.93% 1-day vol

MSFT Volatility

34.2%

±2.16% 1-day vol

1-day volatility (1σ)

TCS

±1.93%

MSFT

±2.16%

Tata Consultancy Services's 30.6% annualized volatility translates to about ±1.93% one-standard-deviation daily volatility.

Microsoft's 34.2% annualized volatility translates to about ±2.16% one-standard-deviation daily volatility.

MSFT had the wider volatility profile over this window. That means its day-to-day return distribution was broader; TCS was calmer, but lower volatility does not by itself mean better returns.

Treat the ± daily figure as a one-standard-deviation estimate from historical returns, not a forecast or expected absolute daily move. For context, 15-18% annualized volatility is roughly ±1% one-standard-deviation daily volatility.

Risk-adjusted ratios

Sharpe Ratio of TCS and MSFT

Sharpe Ratio: TCS vs. MSFT

Return per total volatility

Sharpe gives us excess return per unit of risk. Upside and downside volatility both count as risk.

Higher is better

excess return / total volatility

Formula

\displaystyle \mathrm{Sharpe} = \frac{\mathbb{E}[R] - R_f}{\sigma_R}

Sharpe ratio measures return per unit of risk (volatility). A higher Sharpe indicates better risk-adjusted performance. TCS had a negative Sharpe (-1.08) while MSFT was positive (0.10), indicating MSFT had meaningfully better risk-adjusted performance in this period.

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 TCS and MSFT

Sortino Ratio: TCS vs. MSFT

Return per downside volatility

Sortino keeps the return-over-risk idea, but only returns below the target rate count as volatility.

Higher is better

excess return / downside volatility

Formula

\displaystyle \mathrm{Sortino} = \frac{\mathbb{E}[R] - R_f}{\sigma_{\mathrm{down}}}

Sortino ratio measures return per unit of downside risk. Unlike Sharpe, it only counts downside deviation (returns below the target return). MSFT 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: TCS 23.3% vs MSFT 22.0%. 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 TCS and MSFT

Calmar Ratio: TCS vs. MSFT

CAGR per worst drawdown

Calmar compares CAGR against the single deepest peak-to-trough loss over the period.

Higher is better

CAGR / max drawdown

Formula

\displaystyle \mathrm{Calmar} = \frac{\mathrm{CAGR}}{|\mathrm{MaxDD}|}

Calmar ratio compares CAGR to maximum drawdown. Higher Calmar means more return per unit of worst drawdown. MSFT 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 TCS and MSFT

Sterling Ratio: TCS vs. MSFT

Return per average drawdown

Sterling smooths the drawdown penalty by using average drawdown events instead of only the worst one.

Higher is better

excess annual return / average deep drawdown

Formula

\displaystyle \mathrm{Sterling} = \frac{\mathrm{CAGR} - R_f}{\overline{D}_{>10\%}}

Sterling ratio measures excess return per unit of average drawdown (typically drawdowns worse than 10%). MSFT 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 TCS and MSFT

Treynor Ratio: TCS vs. MSFT

Excess return per market beta

Treynor divides excess annualized return by beta — the sensitivity of the asset to broad-market moves. The slope shown is each asset’s beta vs SPY.

Higher is better

excess return / market beta

Formula

\displaystyle \mathrm{Treynor} = \frac{\mathbb{E}[R] - R_f}{\beta}

Treynor ratio measures excess return per unit of market risk (beta) instead of total volatility. MSFT 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 TCS and MSFT

Ulcer Index: TCS vs. MSFT

Drawdown pain

Ulcer Index is a risk index, not a return-over-risk ratio. Lower means smaller and shorter drawdowns.

Lower is better

root-mean-square drawdown

Formula

\displaystyle \mathrm{UI} = \sqrt{\mathbb{E}[D_t^2]}

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): Tata Consultancy Services 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.

Tail Risk & Distribution Shape: TCS vs. MSFT (1-Year)

Actual daily return tails

The bars are real daily log-return observations from the article window. Darker bars are observations at or beyond each asset’s 5% VaR cutoff.

Observed returns

VaR marks the 5th percentile loss cutoff; Expected Shortfall averages the observations beyond that cutoff.

Formula

\displaystyle \mathrm{VaR}_{5\%}=Q_{0.05}(r_t),\quad \mathrm{ES}_{5\%}=\mathbb{E}[r_t\mid r_t\le \mathrm{VaR}_{5\%}]

Metric (1-Year)	TCS	MSFT
5% VaR (daily log return)	-3.65%	-3.23%
5% Expected Shortfall (CVaR)	-5.02% (worst 12 days)	-4.37% (worst 12 days)
Skew	-0.45	1.06
Excess kurtosis	2.54	11.25
2σ tail days (down / up)	8 / 6	3 / 5
Worst day	-8.11% (2026-06-03)	-9.99% (2026-01-29)
Best day	+5.90% (2026-06-02)	+15.51% (2026-07-30)

Downside co-moves (2σ) — 1-Year

Computed on shared dates only (n=238). 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.

Downside co-move map: TCS vs. MSFT (2σ)

Shared-close daily returns

Dots mark actual downside days: asset-colored dots are one-sided downside moves, and red dots are joint downside days. Grey dots add sampled shared-return context when available. The shaded lower-left zone shows where both TCS and MSFT crossed their own 2σ downside threshold.

2σ

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 TCS and MSFT had a big down day (2σ)

None in this window.

Days when TCS had a big down day

Date (interval)	TCS	MSFT
2026-02-04	-7.20%	+0.72%
2026-02-12	-5.64%	-0.63%
2026-02-24	-4.14%	+1.18%
2026-03-19	-4.36%	-0.71%
2026-04-10 → 2026-04-13	-4.16%	+3.64%
2026-04-24	-5.27%	+2.13%
2026-05-12	-4.84%	-1.18%
2026-06-03	-8.11%	-3.17%

Days when MSFT had a big down day

Date (interval)	TCS	MSFT
2026-01-29	-2.28%	-9.99%
2026-02-05	+0.08%	-4.95%
2026-06-02	+5.90%	-4.17%

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.

Full Comparison of Tata Consultancy Services vs. Microsoft (1-Year)

Metric	TCS	MSFT
Total Return	-27.5%	+1.5%
Annualized Volatility	30.6%	34.2%
Sharpe Ratio	-1.08	0.10
Sortino Ratio	-1.42	0.16
Calmar Ratio	-0.66	0.04
Sterling Ratio	-0.75	-0.06
Treynor Ratio	-1.45	0.03
Ulcer Index	23.25%	19.47%
Max Drawdown	-41.9%	-34.8%
Avg Correlation to S&P 500	0.15	0.43
5% VaR (daily log return)	-3.65%	-3.23%
5% Expected Shortfall (CVaR)	-5.02%	-4.37%
Skew	-0.45	1.06
Excess kurtosis	2.54	11.25
2σ tail days (down / up)	8 / 6	3 / 5

Audit this calculation

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

Inputs & conventions

Shared window for pair metrics: 2025-08-29 → 2026-08-28 (last shared close).
Rolling correlation sample (shared closes): 209 rolling 30-day values (from 238 shared daily returns).
Annualization (days/year): TCS: 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:

TCS: 3.81% over 2025-08-29 → 2026-08-28.

MSFT: 3.81% over 2025-08-29 → 2026-08-28.
Volatility drag (rule of thumb): Estimated from annualized volatility (simple returns). For the log-return framing, see Log returns.

TCS: ≈ -4.7%/yr

MSFT: ≈ -5.8%/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.

Tata Consultancy Services vs Microsoft: Frequently Asked Questions

Which has higher volatility: TCS or MSFT?

MSFT showed higher volatility at 34.2% annualized, compared to 30.6% for TCS Over the past year. Higher volatility means larger price swings in both directions.

Does TCS provide diversification when held with MSFT?

TCS and MSFT are weakly correlated over the past year, with an average correlation of 0.08. This weak correlation suggests meaningful diversification benefits when held together.

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

Over the past year, TCS's 5% VaR was -3.65% and its 5% Expected Shortfall was -5.02% (worst 12 days). MSFT's were -3.23% and -4.37% (worst 12 days).

Do TCS and MSFT crash together on bad days?

On shared dates (n=238), when MSFT has a 2σ down day, TCS also does 0.0% (0/3 days). In the other direction, when TCS has one, MSFT also does 0.0% (0/8 days).

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

TCS had a negative Sharpe (-1.08) while MSFT was positive (0.10) Over the past year, indicating MSFT had meaningfully better risk-adjusted performance.

Can TCS and MSFT be combined in a portfolio?

Yes, though allocation sizing matters. Their weak correlation could meaningfully reduce overall portfolio variance. MSFT's higher volatility (34.2%) means even small allocations can materially impact overall portfolio risk.

Explore our financial glossary

Which is a better investment: TCS or MSFT?

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Relative Performance of TCS vs MSFT (Normalized to 100)

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Key Takeaways

Investment Comparison

Tata Consultancy Services vs Microsoft Performance Over Time

Tata Consultancy Services vs Microsoft Correlation

Drawdown

Tata Consultancy Services vs Microsoft Volatility (TCS vs MSFT)

Risk-adjusted ratios

Sharpe Ratio of TCS and MSFT

Sharpe Ratio: TCS vs. MSFT

Sortino Ratio of TCS and MSFT

Sortino Ratio: TCS vs. MSFT

Calmar Ratio of TCS and MSFT

Calmar Ratio: TCS vs. MSFT

Sterling Ratio of TCS and MSFT

Sterling Ratio: TCS vs. MSFT

Treynor Ratio of TCS and MSFT

Treynor Ratio: TCS vs. MSFT

Ulcer Index of TCS and MSFT

Ulcer Index: TCS vs. MSFT

Tail Risk & Distribution Shape (1-Year): Tata Consultancy Services vs. Microsoft

Tail Risk & Distribution Shape: TCS vs. MSFT (1-Year)

Downside co-moves (2σ) — 1-Year

Downside co-move map: TCS vs. MSFT (2σ)

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

Days when TCS had a big down day

Days when MSFT had a big down day

Full Comparison of Tata Consultancy Services vs. Microsoft (1-Year)

Inputs & conventions

Formulas

Tata Consultancy Services vs Microsoft: Frequently Asked Questions

Which has higher volatility: TCS or MSFT?

Does TCS provide diversification when held with MSFT?

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

Do TCS and MSFT crash together on bad days?

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

Can TCS and MSFT be combined in a portfolio?