Microsoft's Stock Performance: A Risk-Adjusted Comparison

24th April 2024

Microsoft Corporation (MSFT)

Microsoft Corp's (MSFT) stock price closed at $399.12 on April 24th, 2024, with a change of -1.27% on the day. This represents a year-to-date decline of approximately 5% for the tech giant.

To assess the riskiness of Microsoft's stock performance over the past year, we can compare its volatility to other publicly traded companies. The annualized standard deviation of Microsoft's daily returns over the past year was 3.12%. This suggests that the stock has been relatively stable compared to the broader market. The S&P 500 index, for example, had an annualized standard deviation of 4.23% over the same period.

Another way to measure risk is to look at the beta of a stock. Beta measures the sensitivity of a stock's price movements to changes in the overall market. A beta greater than 1.0 indicates that a stock is more volatile than the market, while a beta less than 1.0 indicates that a stock is less volatile. Microsoft's beta is currently 0.85, which suggests that it is less volatile than the broader market.

Overall, Microsoft's stock performance has been relatively risk-averse over the past year. This is reflected in its low volatility and beta, as well as its relatively modest price decline in a year where many technology stocks have experienced significant losses.