Evolution of cooperation has traditionally been studied by assuming that individuals adopt either of two pure strategies, to cooperate or defect. Recent work has considered continuous cooperative investments, turning full cooperation and full defection into two opposing ends of a spectrum and sometimes allowing for the emergence of the traditionally-studied pure strategies through evolutionary diversification. These studies have typically assumed a well-mixed population in which individuals are encountered with equal probability. Here, we allow for the possibility of assortative interactions by assuming that, with specified probabilities, an individual interacts with one or more other individuals of the same strategy. A closely related assumption has previously been made in evolutionary game theory and has been interpreted in terms of relatedness. We systematically study the effect of relatedness and find, among other conclusions, that the scope for evolutionary branching is reduced by either higher average degree of, or higher uncertainty in, relatedness with interaction partners. We also determine how different types of non-linear dependencies of benefits and costs constrain the types of evolutionary outcomes that can occur. While our results overall corroborate the conclusions of earlier studies, i.e. higher relatedness promotes the evolution of cooperation, our investigation gives a comprehensive picture of how relatedness affects the evolution of cooperation with continuous investments.