The stock markets have become a popular topic within machine learning (ML) communities, with one particular application being stock price prediction. However, accurately predicting the stock market is a challenging task due to the various factors within financial markets. With the introduction of ML, prediction techniques have become more efficient but computationally demanding for classical computers. Given the rise of quantum computing (QC), which holds great promise for being exponentially faster than current classical computers, it is natural to explore ML within the QC domain. In this study, we leverage a hybrid quantum-classical ML approach to predict a company’s stock price. We integrate classical long short-term memory (LSTM) with QC, resulting in a new variant called QLSTM. We initially validate the proposed QLSTM model by leveraging an IBM quantum simulator running on a classical computer, after which we conduct predictions using an IBM real quantum computer. Thereafter, we evaluate the performance of our model using the root mean square error (RMSE) and prediction accuracy. Additionally, we perform a comparative analysis, evaluating the prediction performance of the QLSTM model against several other classical models. Further, we explore the impacts of hyperparameters on the QLSTM model to determine the best configuration. Our experimental results demonstrate that while the classical LSTM model achieved an RMSE of 0.0693 and a prediction accuracy of 0.8815, the QLSTM model exhibited superior performance, achieving values of 0.0602 and 0.9736, respectively. Furthermore, the QLSTM outperformed other classical models in both metrics.

Credit card fraud detection is crucial for financial security which entails identifying unauthorized transactions that can result in significant financial losses. Detection is inherently challenging due to the rarity and indistinguishability of fraudulent transactions from genuine ones, which makes it an anomaly detection problem. Traditional detection systems struggle with the highly imbalanced nature of transaction datasets, where genuine transactions vastly outnumber fraudulent cases. In response to these challenges, we propose a novel detection model utilizing Quantum AutoEncoders-based Fraud Detection (QAE-FD). Our approach leverages quantum computing principles to enhance anomaly detection capabilities by encoding transaction data into compressed quantum states and optimizing the model against a loss function that evaluates the fidelity in flagging fraudulent transactions. The efficacy of the QAE-FD model is tested on a real-world credit card transaction dataset, achieving a G-mean of 0.946 and an AUC of 0.947 which demonstrates superior performance compared to existing models. Our results indicate that QAE-FD has not only higher accuracy in fraud detection but also better computational efficiency. The integration of quantum autoencoders is a promising advancement in the field of anomaly detection for credit card fraud, addressing the limitations of imbalanced datasets and offering a scalable solution for real-time detection systems.

Portfolio optimization is a primary component of the decision-making process in finance, aiming to tactfully allocate assets to achieve optimal returns while considering various constraints. Herein, we proposed a method that uses the knapsack-based portfolio optimization problem and incorporates the quantum computing capabilities of the quantum walk mixer with the quantum approximate optimization algorithm (QAOA) to address the challenges presented by the NP-hard problem. Additionally, we present the sequential procedure of our suggested approach and demonstrate empirical proof to illustrate the effectiveness of the proposed method in finding the optimal asset allocations across various constraints and asset choices. Moreover, we discuss the effectiveness of the QAOA components in relation to our proposed method. Consequently, our study successfully achieves the approximate ratio of the portfolio optimization technique using a circuit layer of p ⩾ 3, compared to the classical best-known solution of the knapsack problem. Our proposed methods potentially contribute to the growing field of quantum finance by offering insights into the potential benefits of employing quantum algorithms for complex optimization tasks in financial portfolio management.

Presents corrections to the paper, (Corrections to “Enhancing Knapsack-Based Financial Portfolio Optimization Using Quantum Approximate Optimization Algorithm”).