Benchmarking Quantum Solvers in Noisy Digital Simulations for Financial Portfolio Optimization

• URL: http://arxiv.org/abs/2508.21123v1
• Date: Thu, 28 Aug 2025 18:00:08 GMT
• Title: Benchmarking Quantum Solvers in Noisy Digital Simulations for Financial Portfolio Optimization
• Authors: Ruizhe Shen, Zichang Hao, Ching Hua Lee,
• Abstract summary: We benchmark two prominent quantum algorithms: Quantum Imaginary-Time Evolution (QITE) and the Quantum Approximate Optimization Algorithm (QAOA)<n>We apply them to the Markowitz portfolio optimization problem in quantitative finance, on both digital quantum computers and local quantum simulators with controllable two-qubit errors (noise)<n>Our findings provide valuable insights into the trade-offs between scalability and noise tolerance and demonstrate the practical potential of quantum algorithms for solving real-world optimization problems on near-term quantum devices.
• Score: 6.856553510045862
• License: http://creativecommons.org/licenses/by/4.0/
• Abstract: In this work, we benchmark two prominent quantum algorithms: Quantum Imaginary-Time Evolution (QITE) and the Quantum Approximate Optimization Algorithm (QAOA) for obtaining the ground state of Ising-type Hamiltonians. Specifically, we apply them to the Markowitz portfolio optimization problem in quantitative finance, on both digital quantum computers and local quantum simulators with controllable two-qubit errors (noise). In noiseless settings, we find that QAOA achieves excellent convergence to the optimal results. Under noisy conditions, the QITE method exhibits greater robustness and stability, though it incurs substantially more classical numerical cost. In contrast, we demonstrate that QAOA offers better scalability and can still yield robust results if the noise can be effectively mitigated. Our findings provide valuable insights into the trade-offs between scalability and noise tolerance and demonstrate the practical potential of quantum algorithms for solving real-world optimization problems on near-term quantum devices.

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