The paragraph explains one of the uses of the securities market index:

I did not understand it, could you please explain it to me in detail?

"Finally, work in portfolio and capital market theory has implied that the relevant risk for an individual risky asset is its systematic risk, which is the relationship between the rates of return for a risky asset and the rates of return for a market portfolio of risky assets. Therefore, an aggregate market index is used as a proxy for the market portfolio of risky assets."