Beta often is a "meaningless concept"

When correlation is low, hedge fund investors are "simply wrong" to use beta

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