Quantum computing shows ‘high potential’ for risk aggregation
Leveraging a quantum circuit born machine-based framework on standardized, historical indexes, the researchers say they were able to effectively train quantum circuits to learn correlations among three and four indexes. The prediction derived from the quantum framework outperformed those of classical modeling approaches in some cases, confirming that quantum copulas can potentially lead to smarter data-driven analysis and decision-making across commercial applications.
“Together with GE Research, IonQ is pushing the boundaries of what is currently possible to achieve with quantum computing,” says Peter Chapman, CEO and President, IonQ. “While classical techniques face inefficiencies when multiple variables have to be modeled together with high precision, our joint effort has identified a new training strategy that may optimize quantum computing results even as systems scale. Tested on our industry-leading IonQ Aria system, we’re excited to apply these new methodologies when tackling real world scenarios that were once deemed too complex to solve.”
While classical techniques to form copulas using mathematical approximations are a great way to build multi-variate risk models, say the researchers, they face limitations when scaling. The researchers successfully trained quantum copula models with up to four variables on IonQ’s trapped ion systems by using data from four representative stock indexes with easily accessible and variating market environments.
By studying the historical dependence structure among the returns of the four indexes during this timeframe, the research group trained its model to understand the underlying dynamics. Additionally, the newly presented methodology includes optimization techniques that potentially allow models to scale by mitigating local minima and vanishing gradient problems common in quantum machine learning practices.
Such improvements, say the researchers, demonstrate a promising way to perform multi-variable analysis faster and more accurately, which GE researchers hope lead to new and better ways to assess risk with major manufacturing processes such as product design, factory operations, and supply chain management.
“As we have seen from recent global supply chain volatility,” says David Vernooy, a Senior Executive and Digital Technologies Leader at GE Research, “the world needs more effective methods and tools to manage risks where conditions can be so highly variable and interconnected to one another. The early results we achieved in the financial use case with IonQ show the high potential of quantum computing to better understand and reduce the risks associated with these types of highly variable scenarios.”
The results follow IonQ’s recent announcement of the company’s new IonQ Forte quantum computing system. The system features novel, cutting-edge optics technology that enables increased accuracy and further enhances IonQ’s industry leading system performance.
For more, see “Copula-based Risk Aggregation with Trapped Ion Quantum Computers.”
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