The attractiveness of one investment (one asset, or a group of assets, etc.) in relation to another, for example in terms of risks, returns, risk-return profile, time horizon, liquidity, etc., all on a comparative basis (one investment to another). Relative value helps determine an investment’s worth while considering the value of similar or comparable investments. As a measure, relative value does not solely focus on the intrinsic value of the respective investment or asset, but on the broader context where assessment takes place against other investments/ assets.

The absolute value, on the contrary, is derived mainly from an investment’s intrinsic value without comparing it to other investments.