Alpha and Active Risk Management
If the level of market risk or systematic risk were the only influencing factor then a portfolio return would always be equal to the beta adjusted market return. Of course this is not the case.
Returns vary because of a number of factors unrelated to market risk.
Investment managers who follow an active strategy take on other risks to achieve excess returns over the market performance. Active strategies include stock, sector or country selection, fundamental analysis and charting.
Active managers are on the hunt for an alpha, the measure of excess return. Alpha is the amount of portfolio return not explained by beta. Active managers expose investors to alpha risk, the risk that the result of their bets will prove negative rather than positive.