Magnificent Seven Correlations Fall to a More Than Decade Low

The Magnificent Seven’s stock returns have become less synchronized, with a 60-day measure reaching its lowest point in more than a decade as business results diverge across members.

The measure averages rolling 60-day correlations in daily returns across all 21 pairs among Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla. It stood at 0.12 on Oct. 16, its lowest reading since October 2013, then rose to 0.22 by the Oct. 27 close. The calculation uses daily adjusted closing prices from May 18, 2012, onward; the average across the full period was 0.44.

The spread within the group was also wide. Through the Oct. 27 close, Apple’s average correlation with the other six stocks was 0.08, while Nvidia’s was 0.09. Alphabet and Amazon had the strongest pairwise relationship, at 0.62. These figures reflect different pair comparisons, rather than one shared movement for all seven stocks.

Correlation describes how closely returns move together over a chosen period. A lower reading means the stocks’ daily moves were less aligned, but it does not show whether they rose or fell. It also does not establish that any company’s underlying business weakened; earnings, revenue and other company-specific factors require separate measures.

The companies still had a large influence on broad U.S. equity performance. The Magnificent Seven contributed 62% of the S&P 500’s returns in 2023 and 53% in 2024. Less synchronized trading means the group’s members followed a less uniform return pattern, though correlation alone does not determine their effect on the index.

Business results also differ. For the quarter ended June 30, Microsoft’s Azure and other cloud services revenue rose 43% from a year earlier. Google Cloud revenue increased 82% to $24.8 billion, while Amazon Web Services sales rose 37% to $42.2 billion. Those growth rates do not explain the correlation readings; they show variation across the companies’ reported cloud businesses.

“This requires a much more granular approach to which of the largest mega-caps an investor wants to own as opposed to just owning them wholesale,” said Gil Luria, an analyst at D.A. Davidson.