End-to-End Portfolio Optimization with Quantum Annealing
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arXiv
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| Autores principales: | , , , , , |
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| Formato: | Preprint |
| Publicado: |
2025
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| _version_ | 1866915753963290624 |
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| author | Morapakula, Sai Nandan Deshpande, Sangram Yata, Rakesh Ubale, Rushikesh Wad, Uday Ikeda, Kazuki |
| author_facet | Morapakula, Sai Nandan Deshpande, Sangram Yata, Rakesh Ubale, Rushikesh Wad, Uday Ikeda, Kazuki |
| contents | Hybrid-quantum classical optimization has emerged as a promising direction for addressing financial decision problems under current quantum hardware constraints. In this work we present a practical end-to-end portfolio optimization pipeline that combines (i) a continuous mean-variance and Sharpe-ratio formulation, (ii) a QUBO/CQM-based discrete asset selection stage solved using D-Wave's hybrid quantum annealing solver, (iii) classical convex optimization for computing optimal asset weights, and (iv) a quarterly rebalancing mechanism. Rather than claiming quantum advantage, our goal is to evaluate the feasibility and integration of these components within a deployable financial workflow. We empirically compare our hybrid pipeline against a fund manager in real time and indexes used in Indian stock market. The results indicate that the proposed framework can construct diversified portfolios and achieve competitive returns. We also report computational considerations and scalability observations drawn from the hybrid solver behaviour. While the experiments are limited to moderate sized portfolios dictated by current annealing hardware and QUBO embedding constraints, the study illustrates how quantum assisted selection and classical allocation can be combined coherently in a real-world setting. This work emphasizes methodological reproducibility and practical applicability, and aims to serve as a step toward larger-scale financial optimization workflows as quantum annealers continue to mature. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2504_08843 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | End-to-End Portfolio Optimization with Quantum Annealing Morapakula, Sai Nandan Deshpande, Sangram Yata, Rakesh Ubale, Rushikesh Wad, Uday Ikeda, Kazuki Quantum Physics General Economics Economics Optimization and Control Portfolio Management Risk Management Hybrid-quantum classical optimization has emerged as a promising direction for addressing financial decision problems under current quantum hardware constraints. In this work we present a practical end-to-end portfolio optimization pipeline that combines (i) a continuous mean-variance and Sharpe-ratio formulation, (ii) a QUBO/CQM-based discrete asset selection stage solved using D-Wave's hybrid quantum annealing solver, (iii) classical convex optimization for computing optimal asset weights, and (iv) a quarterly rebalancing mechanism. Rather than claiming quantum advantage, our goal is to evaluate the feasibility and integration of these components within a deployable financial workflow. We empirically compare our hybrid pipeline against a fund manager in real time and indexes used in Indian stock market. The results indicate that the proposed framework can construct diversified portfolios and achieve competitive returns. We also report computational considerations and scalability observations drawn from the hybrid solver behaviour. While the experiments are limited to moderate sized portfolios dictated by current annealing hardware and QUBO embedding constraints, the study illustrates how quantum assisted selection and classical allocation can be combined coherently in a real-world setting. This work emphasizes methodological reproducibility and practical applicability, and aims to serve as a step toward larger-scale financial optimization workflows as quantum annealers continue to mature. |
| title | End-to-End Portfolio Optimization with Quantum Annealing |
| topic | Quantum Physics General Economics Economics Optimization and Control Portfolio Management Risk Management |
| url | https://arxiv.org/abs/2504.08843 |