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Quantum Physics

Title: Financial Risk Management on a Neutral Atom Quantum Processor

Abstract: Machine Learning models capable of handling the large datasets collected in the financial world can often become black boxes expensive to run. The quantum computing paradigm suggests new optimization techniques, that combined with classical algorithms, may deliver competitive, faster and more interpretable models. In this work we propose a quantum-enhanced machine learning solution for the prediction of credit rating downgrades, also known as fallen-angels forecasting in the financial risk management field. We implement this solution on a neutral atom Quantum Processing Unit with up to 60 qubits on a real-life dataset. We report competitive performances against the state-of-the-art Random Forest benchmark whilst our model achieves better interpretability and comparable training times. We examine how to improve performance in the near-term validating our ideas with Tensor Networks-based numerical simulations.
Comments: 17 pages, 11 figures, 2 tables, revised version
Subjects: Quantum Physics (quant-ph); Strongly Correlated Electrons (cond-mat.str-el); Computational Engineering, Finance, and Science (cs.CE); Machine Learning (cs.LG)
Journal reference: Phys. Rev. Research 5, 043117 (2023)
Cite as: arXiv:2212.03223 [quant-ph]
  (or arXiv:2212.03223v2 [quant-ph] for this version)

Submission history

From: Roman Orus [view email]
[v1] Tue, 6 Dec 2022 18:43:38 GMT (1798kb,D)
[v2] Wed, 3 Apr 2024 10:04:02 GMT (1812kb,D)

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