Exposure Limits and Correlation: How do you guys manage?

I'm still wrapping my head around proper risk sizing, especially when you're looking at multiple positions that feel independent but might actually be correlated. Say you're long $NVDA and $AMD because you like the chip sector, but then you also have a position in an ETF that heavily weights those same names. Or, perhaps less obviously, you're long $USDJPY and also short $EURUSD because you have a strong dollar thesis. How do you all account for the overlapping exposure and potential compounding risk when setting your overall portfolio limits? Is it as simple as just adding up the beta-adjusted notional, or are there more sophisticated approaches you use to prevent a nasty surprise when the tide goes out?