A recent paper by Lyxor points to a fruitful channel for evaluating hedge fund performance. The paper, "A New Era for Hedge Funds?" http://www.lyxor.com/publications/white-papers/wp/455/ examines hedge fund performance over a long period and links the performance to key factors, especially stock market performance, interest rate trends and market volatility. It funds significant differences in both hedge fund performance and alpha depending on the movement of these factors. This is much more fruitful then the endless discussions of performance over a short-term horizon.