What is relative value strategy？

Relative value strategy is an investment strategy that involves identifying and exploiting price discrepancies between related financial instruments. This strategy involves analyzing the relationships between various securities or assets and identifying those that are undervalued or overvalued relative to their peers. The goal of a relative value strategy is to profit from the price differences as the market eventually corrects itself. This strategy is commonly used in fixed income, currency, and commodity markets, where there are often clear relationships between different securities or assets.