Institutional investors tend to use a different vocabulary when speaking about risk, compared with hedge fund managers. Investors often talk about beta and benchmarks; hedge funds talk about correlations and absolute returns. Betas and correlations are closely related to each other, but not the way most think.
Institutional investors as a group first learned about quantifying risk when they were introduced to the concept of beta. The conventional interpretation is that beta measures the relative
The week on Risk.net, December 9–15 2017Receive this by email