Alpha Risk

Alpha risk is a ratio that your portfolio manager uses to compare her picks for your fund or portfolio against a benchmark (that could be other funds or the S&P 500).

If your manager picks a bunch of stocks and investments that push your fund up 10% in a year when the S&P 500 (or whatever the benchmark is) is doing 8%, your manager gets bragging rights (and possibly a nicer office and a promotion).

Alpha risk is often expressed in math equations that would only make a mathlete happy, but the main thing to remember is that when someone talks about High Alpha, that's good (low Alpha is bad).