The quantum annealing algorithm is an optimization algorithm which utilizes the quantum tunnelling effect produced by quantum fluctuations to escape local optima, thus enhancing the chance of finding the global optimal solution. Portfolio optimization problems effectively describe activities such as
Quantum annealing (QA) algorithm is a new quantum optimization algorithm based on the classical simulated annealing (SA) algorithm. Unlike classical SA algorithm, which uses the thermal waves to search for the optimal solution, the QA algorithm uses the quantum tunneling effect to allow a quantum to penetrate a potential barrier with a higher energy than itself. Therefore, the algorithm can get rid of the local extreme values and is more likely to approach the global optimal with higher probability. In the literature, the QA algorithm has shown perfect optimization effects on combinatorial optimization problems. In this paper, the basic concepts and application fields of QA algorithm, which is the core principle of D-Wave quantum computer, are systematically reviewed. The applications of QA algorithm in cryptography, traveling salesman problem, graph coloring problem, and traffic path are discussed in detail. In addition, the direction of future research for QA algorithm is explored.
Quantum annealing has emerged as a promising computational paradigm for solving large-scale combinatorial optimization problems that are intractable for classical algorithms. Financial portfolio optimization, which involves balancing expected returns against risk under multiple practical constraints, represents one of the most challenging optimization tasks in quantitative finance. Traditional approaches based on mean-variance theory, heuristic meta-optimization, and classical quadratic programming often struggle to scale efficiently as the dimensionality of assets and constraints increases. This study explores the application of quantum annealing techniques to financial portfolio optimization by formulating the problem as a quadratic unconstrained binary optimization model suitable for quantum hardware. The paper provides a systematic mapping of portfolio objectives and constraints into the Ising Hamiltonian framework and analyzes how quantum tunneling and probabilistic state transitions can enhance convergence toward near-global optima. Comparative insights between classical solvers and quantum annealing-based approaches are discussed in terms of solution quality, computational efficiency, and scalability. Furthermore, the study highlights current hardware limitations, embedding challenges, and noise effects that influence optimization performance. The findings indicate that quantum annealing offers substantial potential for accelerating portfolio optimization in high-dimensional financial systems, particularly in scenarios involving complex constraints and dynamic market conditions, thereby establishing a foundation for future quantum-driven financial decision-support systems.
This paper investigates the application of quantum annealing for solving complex combinatorial optimization problems. The core claim is that quantum annealing leverages its global search capabilities to efficiently address such problems. The proposed mechanism involves formulating the combinatorial optimization problem as a quantum annealing problem and utilizing the simulated annealing process within quantum annealing to conduct a search for the optimal solution. This research explores the potential of quantum annealing in practical applications, acknowledging that its application in combinatorial optimization is still in its exploratory phase. The algorithm is designed to minimize the energy of a system described by a Hamiltonian, which evolves over time according to the time-dependent Schrödinger equation. The core of the algorithm lies in mapping the problem's constraints and objective function into this Hamiltonian. The search process is governed by quantum fluctuations, represented by the operator H^, which encourages transitions to lower energy states, effectively navigating the solution space. The effectiveness of the algorithm is evaluated based on the quality of the solution found and the computational resources required. This work provides a foundational exploration of quantum annealing's potential within the field of combinatorial optimization.
This paper investigates the application of quantum annealing to solve combinatorial optimization problems. The core claim is that quantum annealing algorithms can effectively enhance the efficiency and accuracy of solving such problems. The underlying mechanism involves simulating the quantum annealing process, leveraging the quantum tunneling effect to explore the solution space and identify optimal solutions. This work presents a novel approach by applying quantum annealing to combinatorial optimization, offering a fresh perspective on problem-solving. We explore the theoretical foundations, model the annealing process, and discuss potential challenges and future research directions. The focus is on demonstrating the feasibility and potential benefits of this approach rather than presenting results from experimental implementations.
This paper investigates the application of the Quantum Annealing (QA) algorithm to solve complex optimization problems. The core claim is that simulating a complex optimization problem's local search process through the QA's annealing process can effectively locate global optimal solutions. The mechanism involves mapping the solution space of an optimization problem onto the annealing path of QA, controlling the annealing rate and path to guide the solution towards the optimal point. This research leverages QA's inherent ability to mimic physical annealing, aiming to enhance optimization efficiency and accuracy. We present a framework for formulating and applying QA to various complex problems, highlighting its potential advantages over traditional optimization methods. This work contributes to the growing field of quantum computing by demonstrating a practical approach to tackling challenging optimization tasks. The results suggest that QA can be a viable alternative for achieving superior performance in specific optimization scenarios.
In this study, the portfolio optimization problem is explored, using a combination of classical and quantum computing techniques. The portfolio optimization problem with specific objectives or constraints is often a quadratic optimization problem, due to the quadratic nature of, for example, risk measures. Quantum computing is a promising solution for quadratic optimization problems, as it can leverage quantum annealing and quantum approximate optimization algorithms, which are expected to tackle these problems more efficiently. Quantum computing takes advantage of quantum phenomena like superposition and entanglement. In this paper, a specific problem is introduced, where a portfolio of loans need to be optimized for 2030, considering ‘Return on Capital’ and ‘Concentration Risk’ objectives, as well as a carbon footprint constraint. This paper introduces the formulation of the problem and how it can be optimized using quantum computing, using a reformulation of the problem as a quadratic unconstrained binary optimization (QUBO) problem. Two QUBO formulations are presented, each addressing different aspects of the problem. The QUBO formulation succeeded in finding solutions that met the emission constraint, although classical simulated annealing still outperformed quantum annealing in solving this QUBO, in terms of solutions close to the Pareto frontier. Overall, this paper provides insights into how quantum computing can address complex optimization problems in the financial sector. It also highlights the potential of quantum computing for providing more efficient and robust solutions for portfolio management.