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A comment on Jim Simons proved the textbooks wrong, almost. Parent comment

Re:Jim Simons proved the textbooks wrong, almost by haltingproblem on Monday January 18, 2021 @09:16PM (#25829214)
You are conflating beta with risk. Beta is just the correlation to the SPY return. There might be an asset (e.g. Oil, dunno but using it here for illustration) which have low SPY correlation but still high volatility. Levering it up 2x will bring you portfolio beta wrt to SPY to 1 but give you drawdowns far greater than SPY.
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Re:Jim Simons proved the textbooks wrong, almost by fractionalhare on Monday January 18, 2021 @09:50PM (#25829437)
Yes you're right. I was using beta as a measure of the idiosyncratic volatility, which is incorrect. I concede that point.
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