Abstract In this paper, we investigate the application of quantum and quantum-inspired machine learning algorithms to stock return predictions. Specifically, we evaluate the performance of quantum neural network, an algorithm suited for noisy intermediate-scale quantum computers, and tensor network, a quantum-inspired machine learning algorithm, against classical models such as linear regression and neural networks. To evaluate their abilities, we construct portfolios based on their predictions and measure investment performances. The empirical study on the Japanese stock market shows the tensor network model achieves superior performance compared to classical benchmark models, including linear and neural network models. Though the quantum neural network model attains the lowered risk-adjusted excess return than the classical neural network models over the whole period, both the quantum neural network and tensor network models have superior performances in the latest market environment, which suggests capability of model’s capturing non-linearity between input features.
Abstract In this paper, we investigate the application of quantum and quantum-inspired machine learning algorithms to stock return predictions. Specifically, we evaluate the performance of quantum neural network, an algorithm suited for noisy intermediate-scale quantum computers, and tensor network, a quantum-inspired machine learning algorithm, against classical models such as linear regression and neural networks. To evaluate their abilities, we construct portfolios based on their predictions and measure investment performances. The empirical study on the Japanese stock market shows the tensor network model achieves superior performance compared to classical benchmark models, including linear and neural network models. Though the quantum neural network model attains the lowered risk-adjusted excess return than the classical neural network models over the whole period, both the quantum neural network and tensor network models have superior performances in the latest market environment, which suggests capability of model’s capturing non-linearity between input features.
Quantum machine learning offers a promising pathway for enhancing stock market prediction, particularly under complex, noisy, and highly dynamic financial environments. However, many classical forecasting models struggle with noisy input, regime shifts, and limited generalization capacity. To address these challenges, we propose a Quantum Temporal Convolutional Neural Network (QTCNN) that combines a classical temporal encoder with parameter-efficient quantum convolution circuits for cross-sectional equity return prediction. The temporal encoder extracts multi-scale patterns from sequential technical indicators, while the quantum processing leverages superposition and entanglement to enhance feature representation and suppress overfitting. We conduct a comprehensive benchmarking study on the JPX Tokyo Stock Exchange dataset and evaluate predictions through long-short portfolio construction using out-of-sample Sharpe ratio as the primary performance metric. QTCNN achieves a Sharpe ratio of 0.538, outperforming the best classical baseline by approximately 72\%. These results highlight the practical potential of quantum-enhanced forecasting model, QTCNN, for robust decision-making in quantitative finance.
This research investigates the performance and efficacy of machine learning models in stock prediction, comparing Artificial Neural Networks (ANNs), Quantum Qubit-based Neural Networks (QQBNs), and Quantum Qutrit-based Neural Networks (QQTNs). By outlining methodologies, architectures, and training procedures, the study highlights significant differences in training times and performance metrics across models. While all models demonstrate robust accuracies above 70%, the Quantum Qutrit-based Neural Network consistently outperforms with advantages in risk-adjusted returns, measured by the Sharpe ratio, greater consistency in prediction quality through the Information Coefficient, and enhanced robustness under varying market conditions. The QQTN not only surpasses its classical and qubit-based counterparts in multiple quantitative and qualitative metrics but also achieves comparable performance with significantly reduced training times. These results showcase the promising prospects of Quantum Qutrit-based Neural Networks in practical financial applications, where real-time processing is critical. By achieving superior accuracy, efficiency, and adaptability, the proposed models underscore the transformative potential of quantum-inspired approaches, paving the way for their integration into computationally intensive fields.
In this paper, we present a reproducible benchmarking framework that systematically compares QML models with architecture-matched classical counterparts across three financial tasks: (i) directional return prediction on U.S. and Turkish equities, (ii) live-trading simulation with Quantum LSTMs versus classical LSTMs on the S\&P 500, and (iii) realized volatility forecasting using Quantum Support Vector Regression. By standardizing data splits, features, and evaluation metrics, our study provides a fair assessment of when current-generation QML models can match or exceed classical methods. Our results reveal that quantum approaches show performance gains when data structure and circuit design are well aligned. In directional classification, hybrid quantum neural networks surpass the parameter-matched ANN by \textbf{+3.8 AUC} and \textbf{+3.4 accuracy points} on \texttt{AAPL} stock and by \textbf{+4.9 AUC} and \textbf{+3.6 accuracy points} on Turkish stock \texttt{KCHOL}. In live trading, the QLSTM achieves higher risk-adjusted returns in \textbf{two of four} S\&P~500 regimes. For volatility forecasting, an angle-encoded QSVR attains the \textbf{lowest QLIKE} on \texttt{KCHOL} and remains within $\sim$0.02-0.04 QLIKE of the best classical kernels on \texttt{S\&P~500} and \texttt{AAPL}. Our benchmarking framework clearly identifies the scenarios where current QML architectures offer tangible improvements and where established classical methods continue to dominate.
Stock market forecasting remains one of the most computationally demanding tasks in financial engineering, requiring sophisticated models capable of processing nonlinear patterns, high-frequency volatility, and large volumes of time-series data. Recent advancements in quantum computing offer the potential to surpass classical machine learning (ML) by leveraging principles such as superposition and entanglement to accelerate learning and optimization. This paper conducts a comprehensive comparison between quantum machine learning (QML) models and classical deep learning architectures for stock price prediction, emphasizing the technological improvements and optimization of computational methods. Our analysis integrates insights from prior studies, including the application of quantum-enhanced Gramian Angular Fields with CNNs [2], shallow parameterized quantum circuits for market indicators [4], and hybrid quantum-classical algorithms tailored to finance [1]. Experimental evaluation (using IBM Qiskit's quantum simulators and real hardware) demonstrates competitive performance of quantum neural networks (QNNs) against state-of-the-art recurrent neural networks (RNNs) and long short-term memory (LSTM) architectures [3]. Across AAPL/MSFT and short horizons, compact QNNs match strong LSTM baselines while using an order of magnitude fewer parameters, and—critically—transfer from calibrated simulators to IBM hardware with marginal degradation after mitigation. This device-aware training/evaluation loop exemplifies a deployable path for financial QML under realistic noise and resource constraints and motivates standardized, time-series-aware testing for the community. Results highlight the engineering value of quantum acceleration in feature encoding, the research novelty of hybrid ensemble strategies, and the future scope of benchmarking across leading quantum computing machines such as IBM, Google Sycamore, Rigetti, IonQ, and Xanadu.
Quantum finance, as a key application scenario of quantum computing, showcases multiple significant advantages of quantum machine learning over traditional machine learning methods. This paper first aims to overcome the limitations of the hidden quantum Markov model (HQMM) in handling continuous data and proposes an innovative method to convert continuous data into discrete-time sequence data. Second, a hybrid quantum computing model is developed to forecast stock market trends. The model was used to predict 15 stock indices from the Shanghai and Shenzhen Stock Exchanges between June 2018 and June 2021. Experimental results demonstrate that the proposed quantum model outperforms classical algorithmic models in handling higher complexity, achieving improved efficiency, reduced computation time, and superior predictive performance. This validation of quantum advantage in financial forecasting enables the practical deployment of quantum-inspired prediction models by investors and institutions in trading environments. This quantum-enhanced model empowers investors to predict market regimes (bullish/bearish/range-bound) using real-time data, enabling dynamic portfolio adjustments, optimized risk controls, and data-driven allocation shifts.
Financial markets are complex, nonlinear, and highly dynamic systems, making accurate stock market prediction a challenging task. Traditional statistical and machine learning models often fail to capture the intricate temporal dependencies and high-dimensional interactions present in financial data. This review explores advanced approaches integrating deep learning, quantum computing, equivariant neural networks, and split attention mechanisms for stock market prediction and recommendation systems. Quantum neural networks leverage principles such as superposition and entanglement to enhance feature representation and computational efficiency, while equivariant architectures improve generalization by preserving structural relationships in data. Split attention mechanisms further enhance model performance by capturing both local and global temporal dependencies. The study also examines optimization strategies, including gradient-based methods and evolutionary algorithms, for efficient training of hybrid quantum-classical models. Additionally, the integration of recommendation systems enables personalized investment decision-making by combining market data with user preferences. Evaluations on benchmark financial datasets demonstrate improved prediction accuracy, scalability, and robustness compared to conventional models. Overall, the proposed framework offers a promising direction for developing intelligent, efficient, and next-generation financial forecasting systems.