Relative value is 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. The term is used in economics, business or investment.

[edit] In hedge funds

Some hedge funds engage principally in arbitrage strategies in the global equity and corporate debt markets by taking advantage of mispricings between two related and often correlated securities. Typical arbitrage strategies include: fixed income arbitrage, convertible bond arbitrage, statistical arbitrage, and derivative arbitrage.

[edit] See also

• Resource-Based Relative Value Scale
• Relative Value of Growth

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