2023
DOI: 10.3390/e25020323
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Toward Prediction of Financial Crashes with a D-Wave Quantum Annealer

Abstract: The prediction of financial crashes in a complex financial network is known to be an NP-hard problem, which means that no known algorithm can efficiently find optimal solutions. We experimentally explore a novel approach to this problem by using a D-Wave quantum annealer, benchmarking its performance for attaining a financial equilibrium. To be specific, the equilibrium condition of a nonlinear financial model is embedded into a higher-order unconstrained binary optimization (HUBO) problem, which is then trans… Show more

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Cited by 10 publications
(5 citation statements)
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“…It is thus a natural question whether quantum computation can enhance forecasting financial crashes [20]. This problem has already been investigated in terms of quantum annealing and also run on the D-Wave 2000 quantum annealer for a particular problem instance [39]. Here, we use the same model for a QAOA benchmark.…”
Section: The Financial Crash Problemmentioning
confidence: 99%
“…It is thus a natural question whether quantum computation can enhance forecasting financial crashes [20]. This problem has already been investigated in terms of quantum annealing and also run on the D-Wave 2000 quantum annealer for a particular problem instance [39]. Here, we use the same model for a QAOA benchmark.…”
Section: The Financial Crash Problemmentioning
confidence: 99%
“…Computer-based cognitive applications can be found in sociopolitical applications emerging throughout the 1990s [154,188]. The implementation of cognitive-like processes in computer-aided financial analysis has followed throughout the 20th century a comparable evolution to that of perception, decision-making and asset organisation in the military [50,179]. Arguably the most relevant of these cases is Blackrock's Aladdin financial analytics and risk management system.…”
Section: The Mental Of the Mechanicmentioning
confidence: 99%
“…Furthermore, the open-source libraries for QA facilitate the specification of personalized hybrid workflows through the selection of diverse classical algorithms and embedding technologies, thus providing increased adaptability and customization. Owing to its ability to resolve intricate optimization issues, QA has found applications across various industry sectors such as finance [28][29][30], energy [31,32], transportation [33][34][35] and manufacturing [9,10]. In the context of JSSP, numerous investigations of QA have been conducted.…”
Section: 𝐻 = ∑ 𝑄mentioning
confidence: 99%