Active Return (tracking error) vs. alpha?

[kellyc319]

So in the book it says that active return = return on portfolio - return on benchmark.
How is this really different than alpha?
I guess the book definition of alpha is actual return on portfolio - expected return…but in real life…people throw around alpha and it is meant to be the excess return over the benchmark, which seems to me is the same thing as “active return”?
am i missing something here?

 

[bannisja]

http://pages.stern.nyu.edu/~eofek/InvBank/Understanding%20Hedge%20Fund%2...
check out pg 3 here and the footnotes- the 2 are pretty similar but can’t be used interchangibly b/c of risk. let’s say all of that active return earned were b/c the manager were swinging for the fences on some really risky name. is that really alpha or is the guy just swinging for the fences and got lucky?
active return = alpha + (beta - 1)(rm - rf)
if beta = 1, then active return = alpha