> the hedge fund industry's goal is not necessarily to beat the market, it is to provide the highest level of return per unit of risk. So basically you are say

> the hedge fund industry's goal is not necessarily to beat the market, it is to provide the highest level of return per unit of risk. So basically you are saying a hedge fund is just optimizing for sharpe. That is not true. Sharpe is just one way to compare performance at the same level of vol. It's a useful metric but very limited. It tell you nothing about exposure, risk and distribution. I discussed how hedge funds position themselves here: https://news.ycombinator.com/item?id=30826702 https://news.ycombinator.com/item?id=30826702