What Cosine Similarity of Label Representations Can and Cannot Tell us

The standard way to compare two text embeddings is cosine similarity. Scattered studies report that a different metric does better, but never pin down the geometric condition that decides when, or why. We settle both with a comprehensive empirical study: nineteen parameter-free similarity metrics on nineteen encoders, from compact sentence transformers up to seven-billion-parameter large language models, across seven datasets. The answer is geometric. When an encoder spreads its variance evenly across directions, cosine is the best parameter-free choice and no other metric helps by a usable margin. When the variance concentrates into a few dominant directions, a property known as anisotropy, rank-based and L1-type metrics beat cosine by a clear margin. The absolute gain is modest, but because cosine starts low on these encoders it is a sizable relative improvement, around twenty percent on average and largest where cosine is weakest. What decides this is the geometry of the embedding space, not how the model was trained: where the two disagree, the metric follows the geometry. One number, the fraction of variance held by the single most dominant dimension, predicts how much the alternatives help across all nineteen encoders, with a rank correlation of 0.86 and a linear correlation of 0.95. To test this as the cause rather than a correlate, we project out the dominant directions: cosine recovers and the advantage of the other metrics nearly vanishes, but only on the encoders that were anisotropic to begin with. The effect is directional, not magnitude based, since it survives normalizing every vector to unit length. Among parameter-free metrics, then, cosine is the right tool wherever an encoder is well spread, which includes the fine-tuned embedders commonly deployed for retrieval, and we give a one-number diagnostic for when it is not.

Steck, Ekanadham, and Kallus [arXiv:2403.05440] demonstrate that cosine similarity of learned embeddings from matrix factorization models can be rendered arbitrary by a diagonal gauge'' matrix $D$. Their result is correct and important for practitioners who compute cosine similarity on embeddings trained with dot-product objectives. However, we argue that their conclusion, cautioning against cosine similarity in general, conflates the pathology of an incompatible training objective with the geometric validity of cosine distance on the unit sphere. We prove that when embeddings are constrained to the unit sphere $\mathbb{S}^{d-1}$ (either during or after training with an appropriate objective), the $D$-matrix ambiguity vanishes identically, and cosine distance reduces to exactly half the squared Euclidean distance. This monotonic equivalence implies that cosine-based and Euclidean-based neighbor rankings are identical on normalized embeddings. The problem'' with cosine similarity is not cosine similarity, it is the failure to normalize.

Cosine similarity is widely used to analyze transformer representations, implicitly assuming that similarity reflects task-relevant structure. We study when this assumption fails in dialogue-conditioned large language models. Across three 7-8B chat-tuned models, ambient cosine similarity substantially underestimates linearly decodable persona structure on the same hidden states; numerically, linear probe AUC is in the 0.73-0.97 range while cosine kNN is in the 0.56-0.77 range on a 30-class task. A low-dimensional supervised subspace recovers much of this gap, whereas a matched-rank PCA subspace does not and in some cases degrades performance. This mismatch is regime-dependent: it is absent in single-sentence sentiment classification (SST-5), and a matched-cardinality control rules out attribute cardinality as a confound. The gap does not systematically increase across dialogue turns, and the task-aligned subspace remains stable over time. However, two of three models violate a pre-registered within-subspace separability invariance criterion (|Delta AUC| <= 0.03), and one model violates a pre-registered turn-invariance criterion (|Delta L| <= 0.05). These results show that cosine similarity can fail to reflect task-aligned structure in dialogue representations even when that structure is linearly accessible.