On the other hand, relative valuation leaves room for wrong judgment between overvalued and undervalued securities. Even if a security is found overvalued with relative valuation, it may still be undervalued compared to the market. This happens because relative valuation assumes that although markets are inefficient, errors in pricing can be identified and corrected more easily. However, this applies for the markets in the aggregate and not for individual securities. Also, the fact that relative valuation requires fewer inputs than DCF valuation implies that for any other variable the model makes implicit assumptions, which if proved wrong, the entire model is wrong.