Broadcom vs Taiwan Semiconductor (AVGO vs TSM) 2026: Stock Returns, Risk & Volatility

Q: Which is a better investment: AVGO or TSM?

Over the past year, TSM looks like the better investment: it had higher total return (TSM +133.9% vs AVGO +119.7%) and a higher Sharpe ratio (TSM 2.52 vs AVGO 1.99). On risk, TSM was less volatile (TSM 34.9% vs AVGO 42.3%), TSM had a smaller max drawdown (TSM -18.4% vs AVGO -28.8%), and TSM had less severe losses on the worst 5% of days (Expected Shortfall of TSM -4.32% vs AVGO -5.25%).

Written by Gale Finance Team

Reviewed by Sid Kalla CFA Charterholder

Quick answer

Which is a better investment: AVGO or TSM?

Over the past year, TSM outperformed AVGO. TSM returned +133.9% compared with AVGO’s +119.7%. TSM had the better risk-adjusted return, with a Sharpe ratio of 2.52 versus AVGO’s 1.99. TSM was less volatile than AVGO, and TSM had a smaller max drawdown than AVGO.

Total Return

AVGO +119.7%

TSM +133.9%

Sharpe Ratio

AVGO 1.99

TSM 2.52

Annualized Volatility

AVGO 42.3%

TSM 34.9%

Max Drawdown

AVGO -28.8%

TSM -18.4%

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

AVGO Total Return

↑ +119.7%

TSM Total Return

↑ +133.9%

Relative Performance of AVGO vs TSM (Normalized to 100)

AVGO TSM

Normalized to 100 at start date for comparison

Trade AVGO or TSM

Access these assets on trusted platforms.

Hyperliquid

Trade perpetual futures exposure where supportedAVGOTSMTrade on Hyperliquid

Binance

Trade futures exposure on a global exchange where supportedAVGOTSMTrade on Binance

Affiliate disclosure

Key Takeaways

Total Return: AVGO delivered a +119.7% total return, while TSM returned +133.9% over the same period. TSM outperformed on total returns.
Risk-Adjusted Return (Sharpe Ratio): TSM had a higher Sharpe (2.52 vs 1.99), indicating better risk-adjusted performance.
Volatility (Annualized): AVGO was more volatile, with 42.3% annualized volatility, versus 34.9% for TSM.
Maximum Drawdown: TSM's maximum drawdown was -18.4%, while AVGO experienced a deeper drawdown of -28.8%.
Tail Risk (VaR & Expected Shortfall): At the 5% level (daily log returns), AVGO's VaR was -3.91% and its Expected Shortfall (CVaR) was -5.25%; TSM's were -3.15% and -4.32%. VaR is the cutoff; Expected Shortfall is the average move on the worst days.
Skew & Kurtosis: Skew: AVGO 0.17 vs TSM 0.07. Excess kurtosis: AVGO 3.16 vs TSM 0.73. Negative skew leans downside; higher excess kurtosis means fatter tails.
Tail Days & Extremes: 2σ tail days (down/up): AVGO 5/7, TSM 7/8. Worst day: AVGO -11.43% (2025-12-12) vs TSM -6.41% (2025-10-10). Best day: AVGO +11.10% (2025-11-24) vs TSM +7.92% (2025-10-13).
Risk ratios: Sortino - AVGO: 3.27 vs. TSM: 4.17 , Calmar - AVGO: 4.19 vs. TSM: 7.36 , Sterling - AVGO: 6.63 vs. TSM: 9.08 , Treynor - AVGO: 0.43 vs. TSM: 0.47 , Ulcer Index - AVGO: 11.95% vs. TSM: 5.02%

Investment Comparison

If you invested $10,000 in each asset on April 25, 2025:

AVGO $21,968.01 +119.7%

TSM $23,391.79 +133.9%

Difference: $1,423.78 (TSM ahead)

Broadcom vs Taiwan Semiconductor Performance Over Time

Metric	AVGO	TSM
30 Days	31.9%	11.5%
90 Days	31.2%	14.3%
180 Days	18.8%	30.1%
1 Year	119.7%	133.9%

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

Broadcom vs Taiwan Semiconductor Correlation

Average Correlation

strongly correlated

0.64

Current (30-day) 0.64

30-day rolling range +0.35 to +0.89

Broadcom and Taiwan Semiconductor are strongly correlated over the past year. With a correlation of 0.64, these assets tend to move together, limiting diversification benefits.

For portfolio construction, this strong correlation means holding both AVGO and TSM provides limited risk reduction — they're likely to decline together in downturns.

Metric	Value
Current (30-day)	0.64
Average (full period)	0.64
Minimum (30-day rolling)	0.35
Maximum (30-day rolling)	0.89

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

AVGO

-28.8%

TSM

-18.4%

Broadcom experienced its maximum drawdown of -28.8% from 2025-12-10 to 2026-03-30. It took 23 days to recover.

Taiwan Semiconductor experienced its maximum drawdown of -18.4% from 2026-02-25 to 2026-03-30. It has not yet recovered to its previous peak.

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

Broadcom vs Taiwan Semiconductor Volatility (AVGO vs TSM)

AVGO Volatility

42.3%

±2.67% 1-day vol

TSM Volatility

34.9%

±2.2% 1-day vol

1-day volatility (1σ)

AVGO

±2.67%

TSM

±2.2%

Broadcom's 42.3% annualized volatility translates to about ±2.67% one-standard-deviation daily volatility.

Taiwan Semiconductor's 34.9% annualized volatility translates to about ±2.2% one-standard-deviation daily volatility.

AVGO had the wider volatility profile over this window. That means its day-to-day return distribution was broader; TSM 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 AVGO and TSM

Sharpe Ratio: AVGO vs. TSM

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. TSM had a higher Sharpe (2.52 vs 1.99), 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 AVGO and TSM

Sortino Ratio: AVGO vs. TSM

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). TSM 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: AVGO 25.8% vs TSM 21.1%. 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 AVGO and TSM

Calmar Ratio: AVGO vs. TSM

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. TSM 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 AVGO and TSM

Sterling Ratio: AVGO vs. TSM

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%). TSM 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 AVGO and TSM

Treynor Ratio: AVGO vs. TSM

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. TSM 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 AVGO and TSM

Ulcer Index: AVGO vs. TSM

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. TSM 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): Broadcom vs. Taiwan Semiconductor

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: AVGO vs. TSM (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)	AVGO	TSM
5% VaR (daily log return)	-3.91%	-3.15%
5% Expected Shortfall (CVaR)	-5.25% (worst 13 days)	-4.32% (worst 13 days)
Skew	0.17	0.07
Excess kurtosis	3.16	0.73
2σ tail days (down / up)	5 / 7	7 / 8
Worst day	-11.43% (2025-12-12)	-6.41% (2025-10-10)
Best day	+11.10% (2025-11-24)	+7.92% (2025-10-13)

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.

Downside co-move map: AVGO vs. TSM (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 AVGO and TSM 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 AVGO and TSM had a big down day (2σ)

Date (interval)	AVGO	TSM
2025-10-10	-5.91%	-6.41%
2025-12-12	-11.43%	-4.20%
2026-01-16 → 2026-01-20	-5.43%	-4.45%

Days when AVGO had a big down day

Date (interval)	AVGO	TSM
2025-06-06	-5.00%	+0.90%
2025-10-10	-5.91%	-6.41%
2025-12-12	-11.43%	-4.20%
2025-12-12 → 2025-12-15	-5.59%	-1.47%
2026-01-16 → 2026-01-20	-5.43%	-4.45%

Days when TSM had a big down day

Date (interval)	AVGO	TSM
2025-10-10	-5.91%	-6.41%
2025-12-12	-11.43%	-4.20%
2026-01-16 → 2026-01-20	-5.43%	-4.45%
2026-03-03	-1.56%	-4.33%
2026-03-06	-0.69%	-4.23%
2026-03-12	-1.64%	-5.03%
2026-03-26	-2.95%	-6.22%

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 Broadcom vs. Taiwan Semiconductor (1-Year)

Metric	AVGO	TSM
Total Return	+119.7%	+133.9%
Annualized Volatility	42.3%	34.9%
Sharpe Ratio	1.99	2.52
Sortino Ratio	3.27	4.17
Calmar Ratio	4.19	7.36
Sterling Ratio	6.63	9.08
Treynor Ratio	0.43	0.47
Ulcer Index	11.95%	5.02%
Max Drawdown	-28.8%	-18.4%
Avg Correlation to S&P 500	0.54	0.63
5% VaR (daily log return)	-3.91%	-3.15%
5% Expected Shortfall (CVaR)	-5.25%	-4.32%
Skew	0.17	0.07
Excess kurtosis	3.16	0.73
2σ tail days (down / up)	5 / 7	7 / 8

Audit this calculation

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

Inputs & conventions

Shared window for pair metrics: 2025-04-25 → 2026-04-23 (last shared close).
Rolling correlation sample (shared closes): 220 rolling 30-day values (from 249 shared daily returns).
Annualization (days/year): AVGO: 252 days/year; TSM: 252 days/year.
Risk-free rate: Uses the 3-month U.S. Treasury yield (FRED: DGS3MO), averaged over each asset’s window:

AVGO: 4.17% over 2025-04-25 → 2026-04-23.

TSM: 4.17% over 2025-04-25 → 2026-04-23.
Volatility drag (rule of thumb): Estimated from annualized volatility (simple returns). For the log-return framing, see Log returns.

AVGO: ≈ -8.9%/yr

TSM: ≈ -6.1%/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.

Broadcom vs Taiwan Semiconductor: Frequently Asked Questions

Which has higher volatility: AVGO or TSM?

AVGO showed higher volatility at 42.3% annualized, compared to 34.9% for TSM Over the past year. Higher volatility means larger price swings in both directions.

Does AVGO provide diversification when held with TSM?

AVGO and TSM are strongly correlated over the past year, with an average correlation of 0.64. This strong correlation limits diversification benefits.

How bad are the worst 5% days for AVGO vs TSM?

Over the past year, AVGO's 5% VaR was -3.91% and its 5% Expected Shortfall was -5.25% (worst 13 days). TSM's were -3.15% and -4.32% (worst 13 days).

Do AVGO and TSM crash together on bad days?

On shared dates (n=249), when TSM has a 2σ down day, AVGO also does 42.9% (3/7 days). In the other direction, when AVGO has one, TSM also does 60.0% (3/5 days).

Which has better risk-adjusted returns: AVGO or TSM?

TSM showed better risk-adjusted performance with a Sharpe ratio of 2.52 versus AVGO's 1.99 Over the past year.

Can AVGO and TSM be combined in a portfolio?

Yes, though allocation sizing matters. Their strong correlation provides limited risk reduction since they tend to move together. AVGO's higher volatility (42.3%) means even small allocations can materially impact overall portfolio risk.

Explore our financial glossary

Which is a better investment: AVGO or TSM?

Share This Comparison of AVGO vs TSM

Relative Performance of AVGO vs TSM (Normalized to 100)

Trade AVGO or TSM

Key Takeaways

Investment Comparison

Broadcom vs Taiwan Semiconductor Performance Over Time

Broadcom vs Taiwan Semiconductor Correlation

Drawdown

Broadcom vs Taiwan Semiconductor Volatility (AVGO vs TSM)

Risk-adjusted ratios

Sharpe Ratio of AVGO and TSM

Sharpe Ratio: AVGO vs. TSM

Sortino Ratio of AVGO and TSM

Sortino Ratio: AVGO vs. TSM

Calmar Ratio of AVGO and TSM

Calmar Ratio: AVGO vs. TSM

Sterling Ratio of AVGO and TSM

Sterling Ratio: AVGO vs. TSM

Treynor Ratio of AVGO and TSM

Treynor Ratio: AVGO vs. TSM

Ulcer Index of AVGO and TSM

Ulcer Index: AVGO vs. TSM

Tail Risk & Distribution Shape (1-Year): Broadcom vs. Taiwan Semiconductor

Tail Risk & Distribution Shape: AVGO vs. TSM (1-Year)

Downside co-moves (2σ) — 1-Year

Downside co-move map: AVGO vs. TSM (2σ)

Days when both AVGO and TSM had a big down day (2σ)

Days when AVGO had a big down day

Days when TSM had a big down day

Full Comparison of Broadcom vs. Taiwan Semiconductor (1-Year)

Inputs & conventions

Formulas

Broadcom vs Taiwan Semiconductor: Frequently Asked Questions

Which has higher volatility: AVGO or TSM?

Does AVGO provide diversification when held with TSM?

How bad are the worst 5% days for AVGO vs TSM?

Do AVGO and TSM crash together on bad days?

Which has better risk-adjusted returns: AVGO or TSM?

Can AVGO and TSM be combined in a portfolio?