Quantum Machine Learning (QML) is gaining attention for extracting nonlinear struc-tures from high-dimensional data, yet its practical utility in financial forecasting remains insufficiently verified. This study empirically evaluates the effectiveness of quantum ker-nel learning for sector rotation prediction using daily returns from Fama–French 10 In-dustry Portfolios (2022–2024). We formulated a supervised classification task using a compact nine-feature set comprising mean return, volatility, win rate, excess return, MA5, MA20, max drawdown, 5-day return, and skewness. We compared classical Support Vector Classifiers (RBF and Linear kernels) against a fidelity quantum kernel (ZZFea-tureMap) evaluated on AerSimulator using 1-nearest neighbor classification. Results in-dicate that while the classical RBF kernel achieved the highest average accuracy across all sectors (52.1%), the quantum kernel (50.0%) outperformed the classical linear kernel (48.4%) and achieved the highest accuracy in the Non-Durables (55.0%) and Manufactur-ing (52.2%) sectors, demonstrating superior stability. These findings suggest that the effec-tiveness of quantum kernels in the near term is not universal but sector-dependent and conditional. Although quantum methods currently trail strong classical baselines on av-erage, future research should focus on advanced circuit design and hardware-aware evaluations to unlock their potential.
Quantum Machine Learning (QML) is gaining attention for extracting nonlinear struc-tures from high-dimensional data, yet its practical utility in financial forecasting remains insufficiently verified. This study empirically evaluates the effectiveness of quantum ker-nel learning for sector rotation prediction using daily returns from Fama–French 10 In-dustry Portfolios (2022–2024). We formulated a supervised classification task using a compact nine-feature set comprising mean return, volatility, win rate, excess return, MA5, MA20, max drawdown, 5-day return, and skewness. We compared classical Support Vector Classifiers (RBF and Linear kernels) against a fidelity quantum kernel (ZZFea-tureMap) evaluated on AerSimulator using 1-nearest neighbor classification. Results in-dicate that while the classical RBF kernel achieved the highest average accuracy across all sectors (52.1%), the quantum kernel (50.0%) outperformed the classical linear kernel (48.4%) and achieved the highest accuracy in the Non-Durables (55.0%) and Manufactur-ing (52.2%) sectors, demonstrating superior stability. These findings suggest that the effec-tiveness of quantum kernels in the near term is not universal but sector-dependent and conditional. Although quantum methods currently trail strong classical baselines on av-erage, future research should focus on advanced circuit design and hardware-aware evaluations to unlock their potential.
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.
The growing complexity, interdependencies, and rapid fluctuations inherent in modern financial markets create substantial challenges for accurate forecasting, portfolio optimization, and risk management. Conventional machine learning techniques, while powerful, often face limitations in capturing nonlinear relationships and processing high-dimensional datasets efficiently. Quantum machine learning (QML) has emerged as a promising paradigm that leverages quantum computing principles to enhance predictive modeling in finance. This study presents a comprehensive investigation into the application of QML methods—including variational quantum circuits, quantum kernel estimation, and quantum-enhanced support vector machines—for financial time-series prediction and asset price classification. We propose a hybrid quantum-classical framework that integrates quantum feature mapping with classical optimizers to improve model expressiveness and convergence. Empirical experiments are conducted using historical stock market data and synthetic datasets to benchmark QML approaches against established classical models such as long short-term memory networks and gradient boosting machines. The results demonstrate that QML techniques can achieve superior prediction accuracy and lower computational latency under certain data regimes, particularly when dealing with small-to-medium-sized datasets and high feature correlations. Additionally, the study examines scalability considerations, hardware constraints of near-term quantum devices, and the interpretability of quantum model outputs in financial decision-making contexts. The findings underscore the transformative potential of quantum machine learning as an innovative tool for advancing predictive analytics in finance and provide practical insights into how financial institutions can begin integrating QML capabilities into their workflows.
Quantum kernel methods have been proposed as a promising approach for leveraging near-term quantum computers for supervised learning, yet rigorous benchmarks against strong classical baselines remain scarce. We present a comprehensive empirical study of quantum kernel support vector machines (QSVMs) across nine binary classification datasets, four quantum feature maps, three classical kernels, and multiple noise models, totalling 970 experiments with strict nested cross-validation.
Our analysis spans four phases: (i) statistical significance testing, revealing that none of 29 pairwise quantum-classical comparisons reach significance at α=0.05; (ii) learning curve analysis over six training fractions, showing steeper quantum slopes on six of eight datasets that nonetheless fail to close the gap to the best classical baseline; (iii) hardware validation on IBM ibm_fez (Heron r2), demonstrating kernel fidelity r≥0.976 across six experiments; and (iv) seed sensitivity analysis confirming reproducibility (mean CV 1.4%).
A Kruskal-Wallis factorial analysis reveals that dataset choice dominates performance variance (ε2=0.73), while kernel type accounts for only 9%. Spectral analysis offers a mechanistic explanation: current quantum feature maps produce eigenspectra that are either too flat or too concentrated, missing the intermediate profile of the best classical kernel, the radial basis function (RBF). Quantum kernel training (QKT) via kernel-target alignment yields the single competitive result -- balanced accuracy 0.968 on breast cancer -- but with ~2,000x computational overhead.
Our findings provide actionable guidelines for quantum kernel research. The complete benchmark suite is publicly available to facilitate reproduction and extension.
Quantum machine learning has emerged as a promising paradigm that leverages quantum computational principles to potentially outperform classical approaches on specific learning tasks. This paper presents a comprehensive empirical investigation comparing Quantum Machine Learning (QML), specifically Quantum Support Vector Machines (QSVM) against Classical Machine Learning (CML) baselines including Logistic Regression, K Nearest Neighbors and classical SVMs. We implement quantum kernel methods using variational quantum circuits with angle embedding, IQP and ZZ feature maps on datasets exhibiting varying structural complexity. Our experiments on synthetic quantum generated datasets (Quantum Parity, Quantum Entanglement, Quantum Interference) demonstrate that QSVM achieves superior classification accuracy with improvements ranging from 2.9 % to 60 % over the best classical baselines achieving a 55.6 % overall win rate. Notably, on the Quantum Parity dataset, QSVM consistently outperformed all classical models across multiple configurations. On real-world benchmark datasets (Breast Cancer, Iris, Wine), QSVM Angle achieved 88% accuracy on Breast Cancer compared to 76% for classical SVM Linear a 15.8 % relative improvement while matching the best classical performance on Iris(100%)and Wine(92%). All experiments were conducted using quantum circuit simulation on classical hardware. These results provide empirical evidence that quantum kernel methods offer meaningful advantages over classical approaches on datasets with complex feature interactions. We discuss the theoretical foundations of these improvements including quantum feature space expressivity and kernel alignment.
Financial markets undergo rapid oscillations driven by several volatile causes, necessitating expedited and precise models for risk evaluation and market trend forecasting. Classical models encounter computational constraints when examining high-dimensional, nonlinear datasets. This study seeks to use Quantum Machine Learning (QML) methodologies to expedite risk evaluation and improve volatility forecasting for various financial instruments in real-time settings. The unique contribution of this work is the integration of quantum machine learning with financial risk assessment, leveraging quantum parallelism and kernelized feature spaces to improve the accuracy of market volatility prediction. This framework not only enhances computational efficiency compared to classical models but also provides a scalable foundation for real-time financial decision-making. The system employs Kaggle-style datasets including CME futures, Microsoft (MSFT), Amazon (AMZN), HRB, and historical data from the Dow Jones (DJI). Essential metrics including Open, Close, High, Low, Volume, Volatility Index, and Price Returns were retrieved. A hybrid pipeline combining conventional preprocessing with quantum-enhanced classifiers, including variational quantum circuits, was developed using the Qiskit and Pennylane frameworks. The QML-based model had a prediction accuracy of 95.2% in risk categorization and market direction forecasting, exceeding traditional standards. Quantum models provide significant benefits in velocity and scalability for financial analytics, enabling real-time risk assessment and strategic investment analysis.
Reproducibility archive (code + manuscript) for the paper "Benchmarking Quantum Kernel Support Vector Machines Against Classical Baselines on Tabular Data: A Rigorous Empirical Study with Hardware Validation" (arXiv:2604.18837). The archive contains the full Python benchmark framework, experiment configurations, unit tests, and the compiled manuscript. Quantum kernel methods have been proposed as a promising approach for leveraging near-term quantum computers for supervised learning, yet rigorous benchmarks against strong classical baselines remain scarce. We present a comprehensive empirical study of quantum kernel support vector machines (QSVMs) across nine binary classification datasets, four quantum feature maps, three classical kernels, and multiple noise models, totalling 970 experiments with strict nested cross-validation. Our analysis spans four phases: (i) statistical significance testing; (ii) learning curve analysis; (iii) hardware validation on IBM ibm_fez (Heron r2); and (iv) seed sensitivity analysis. A Kruskal–Wallis factorial analysis reveals that dataset choice dominates performance variance (ε2=0.73), while kernel type accounts for only 9%. Spectral analysis offers a mechanistic explanation: current quantum feature maps produce eigenspectra that are either too flat or too concentrated, missing the intermediate profile of the best classical kernel (RBF). The complete benchmark suite is publicly available to facilitate reproduction and extension.