Tracking Error
A divergence between the price behavior of a position or portfolio and the price behavior of a benchmark. This often is in the context of a hedge that did not work as effectively as intended, instead creating an unexpected profit or loss.
Investopedia Commentary
Tracking errors are reported as a "standard deviation percentage" difference. Basically, it tells you the difference between the return you received and that of the benchmark you were trying to copy.
See also: Benchmark, Hedge, Standard Deviation
tracking error