Learning Temporal Patterns in Financial Time Series: A Comparative Study of Quantum LSTM and Quantum Reservoir Computing

• URL: http://arxiv.org/abs/2605.02656v1
• Date: Mon, 04 May 2026 14:37:31 GMT
• Title: Learning Temporal Patterns in Financial Time Series: A Comparative Study of Quantum LSTM and Quantum Reservoir Computing
• Abstract summary: This study focuses on quantum and classical hybrid architectures for financial time-series fore casting.<n>We assess how lag embeddings affect predictive accuracy and robustness.<n>We benchmark quantum models against classical LSTM and reservoir computing using common error like metrics.
• Score: 0.0
• License: http://creativecommons.org/licenses/by/4.0/
• Abstract: This study explores quantum and classical hybrid architectures for financial time-series fore casting, focusing on Quantum Long Short-Term Memory (QLSTM) networks and Quantum Reservoir Computing (QRC), using univariate and multivariate lag structures on real financial data. We assess how lag embeddings affect predictive accuracy and robustness. Data are en coded into quantum states via amplitude encoding, enabling efficient representation of normalized lagged observations under realistic qubit constraints. The recurrent dynamics of QLSTM and the reservoir of QRC are implemented as parameterized quantum circuits, while classical optimizers train the readout and, where applicable, variational circuit parameters. We benchmark quantum models against classical LSTM and reservoir computing using common error like metrics. Our results show that, with suitable lag selection and amplitude encoding, quantum-enhanced archi tectures match classical baselines in univariate settings and can modestly outperform them in multivariate regimes with correlated inputs, where expressive encodings are most beneficial.

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