The relationships between risk and performance were tested employing within and between analyses at the level of strategic groups in three different industries. As hypothesized, systematic risk did not exhibit a consistent relationship with performance. By contrast, all of the total correlations, the between-group correlations, and the within-group correlations of total risk with performance were in the hypothesized negative direction. These findings suggest that when risk-averse managers reduce total risk, the firm's carnings performance is enhanced. The hypothesized differences between strategic groups in total risk were evident primarily in the computer and pharmaceutical industries. Performance also differed across strategic groups in these two industries, as well as among airlines. Contrary to expectations, systematic risk also differed across strategic groups in all three industries. These ANOVA results indicate that differences in strategic profiles between strategic groups engender differences in total risk, systematic risk, and performance.