relative value

Definition

A measurement of one investment or financial instrument's value relative to another's. For example, an investor may want to compare the financial ratios of two different stocks to determine which stock will be purchased. The investor is determining the value of one stock relative to another.

Use relative value in a sentence

We ran the numbers on the relative value of the company, and things looked promising enough that my spouse and I seemed confident in our investment.

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As an income investor who likes to hold onto my stocks for many years, I measure the relative value of stocks by comparing current and historical dividend yields.

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In regards to the constant fluctuation of fossil fuels in today's economy, the relative value of alternative solutions of wind power, solar power, and propane power is becoming a viable replacement of fossil fuels.

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