market neutral/pair trade concept issue

I seem always to be confused by market neutral and pair trade concept

for pair trade, if you long stock and short the future, I understand why your alpha is doubled, but I don’t get how to can cancel out the beta?

one mention on Schweizer study session 12, p34, says if one want a beta from large cap us stock and alpha from European equity, the investor take a long in S&P future and invest with European equity manager to generate alpha, to become market neutral in European equity market the investor then short a futures based on European equities.

I do get the price difference between the actual price of the European equity and future is the benefit here, is that defined as alpha and has nothing to do with the European beta?



invest with european equities, and short futures based on european equities, this will cancel the systematic risk, so become market neutral (zero beta) in european equities, and may generate alpha based on price difference.