Relative value


Relative value

The attractiveness measured in terms of risk, liquidity, and return of one instrument relative to another, or, for a given instrument, of one maturity relative to another.

Relative Value

The value or desirability of one investment with reference to another. One may compare the relative values of many things, with start-up costs, return, risk, maturity, and liquidity being among the most popular. Comparing relative values helps investors make investment decisions that will maximize returns at the lowest possible level of risk.