Well it has to be some sort of compensation, yet the two are not related or hold any connection to each other. DHT (the androgen that causes hair loss) and Testosterone work differently and at some time in opposite direction. DHT supports facial hair while testosterone works on the follicle’s health.
To sum up the work of Testosterone and DHT:
• More testosterone better beards.
• More testosterone no hair loss or thinning
• Too much testosterone causes presence of DHT, DHT could cause hair loss
• More DHT more facial hair
So, there is no link between growing a beard and hair loss, yet the latter and growing a beard are affected by DHT. DHT terminates follicle so less hair but boosts beard growth. But that doesn’t mean if you have loads of DHT to be bald and strike a great beard. Hair loss is due to sensitivity to DHT not the amount, and high amounts of DHT doesn’t mean bushy beards.
Hair loss will not affect your beard follicles as they are not sensitive to DHT as the hair ones. You could lose beard hair if you have one of these. Alopecia; an autoimmune disease where the body attacks its own follicles and Trichotillomania and impulse psychological disorder in which you pull your own hair.
Now we come to the question why most bald guys go for a beard? Simply to look more attractive, but do beards make guys more attractive?
Beards shown in research to reflect a more mature, wise partner and women perceive it under parenting abilities, but guys go for that look as a trade-off for hair loss.