Quantum Thinking in Finance
A Toy Model of Risk and Superposition.
DOI:
https://doi.org/10.58445/rars.3542Keywords:
Quantum computing in finance, Computational finance, Game theory in financeAbstract
In this paper, we will be discussing how a Hybrid Quantum/Classical algorithm enhanced with Game theory would impact the Finance world, particularly in the Portfolio Optimization Sector. For that purpose, we provide an overview of the current state of the Portfolio Optimization Sector, and an example of a Hybrid Classical/Quantum QAOA optimization algorithm capable of generating Higher Annual Expected returns in comparison to current classical models, while also taking into consideration factors such as the covariance between the assets in the portfolio, and the behavior of other investors of Investment funds using Game theory, and then compare it to current Classical Strategies. We also discuss the current limitations and problems that modern Quantum computers endure, and what impact a Quantum computer with less noise and more qubits may have in Industries such as Mutual funds, Hedge Funds, ETF, and more.
References
References
Wang, Haoshu. Advantages and Applications of Quantum Game Theory. REU paper, University of Chicago, Summer 2022. https://math.uchicago.edu/~may/REU2022/REUPapers/Wang,Haoshu.pdf.
Qiskit Community. Portfolio Optimization. Qiskit Finance. Accessed October 14, 2025. https://qiskit-community.github.io/qiskit-finance/tutorials/01_portfolio_optimization.html.
Symons, B. C. B., S. Tornow, V. Valls, S. Woerner, M. L. Wolf-Bauwens, J. Yard, S. Yarkoni, D. Zechiel, S. Zhuk, and C. Zoufal. Challenges and Opportunities in Quantum Optimization. Nature Reviews Physics 6 (2024): 718–735. https://doi.org/10.1038/s42254-024-00770-9.
Hidary, Jack D. Quantum Computing: An Applied Approach. Cham: Springer, 2019. https://doi.org/10.1007/978-3-030-23922-0.
Ceroni, Jack. Intro to QAOA. PennyLane Demos, November 18, 2020. https://pennylane.ai/qml/demos/tutorial_qaoa_intro/.
IBM Quantum. Quantum Approximate Optimization Algorithm. IBM Quantum Platform. Accessed October 14, 2025. https://quantum.cloud.ibm.com/docs/en/tutorials/quantum-approximate-optimization-algorithm.
Curvo. Nasdaq-100 vs. S&P 500: Annual Returns Comparison. Accessed October 14, 2025. https://curvo.eu/backtest/en/compare-indexes/nasdaq-100-vs-sp-500?currency=usd.
Marques, Rodrigo, and Shoshanna Witman. Nasdaq 100 or S&P 500? The Better Long-Term Investment Might Surprise You. Investopedia, August 22, 2025. https://www.investopedia.com/nasdaq-100-or-s-and-p-500-the-better-long-term-investment-might-surprise-you-11796258.
Xu, Tongyang, and Ming Zhong. Analysis of the Quantum Approximate Optimization Algorithm. Heliyon (2018). https://doi.org/10.1016/j.heliyon.2018.e00770.
Pierre, Samuel. An Introduction to Portfolio Optimization in Python. Built In, April 3, 2025. https://builtin.com/data-science/portfolio-optimization-python.
Author(s). Title of the Paper. In Proceedings of the Conference Name, pages xx–xx. IEEE. Accessed October 14, 2025. https://ieeexplore.ieee.org/document/9222275.
Microsoft Research. What Problems Will We Solve with a Quantum Computer? Microsoft Research Blog, July 5, 2017. https://www.microsoft.com/en-us/research/blog/problems-will-solve-quantum-computer/.
Jawade, Bhavesh. Quantum Computing ?/! Towards Data Science, July 8, 2018. https://towardsdatascience.com/quantum-computing-5b715976e61d/.
NerdWallet. What Is Diversification? How It Works, Benefits. NerdWallet. Accessed October 14, 2025. https://www.nerdwallet.com/investing/learn/diversification.
Additional Files
Posted
Categories
License
Copyright (c) 2026 Valdir Dumba
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
