I am reading up on interest rate models, but currently confused about difference in the two types of models:
no arb models like ho-lee, vasicek etc.
others like nelson siegel, pca models etc.
While I get the basics of fitting the params etc in the models using observed yields, I am not if these models are even used for the same problems? Can Nelson siegel be classified as a short rate model? Are short rate models only used for pricing options? Can both of these be used to "fit" a curve and find relative value?