IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2601.18811.html

Variational Quantum Circuit-Based Reinforcement Learning for Dynamic Portfolio Optimization

Author

Listed:
  • Vincent Gurgul
  • Ying Chen
  • Stefan Lessmann

Abstract

This paper presents a Quantum Reinforcement Learning (QRL) solution to the dynamic portfolio optimization problem based on Variational Quantum Circuits. The implemented QRL approaches are quantum analogues of the classical neural-network-based Deep Deterministic Policy Gradient and Deep Q-Network algorithms. Through an empirical evaluation on real-world financial data, we show that our quantum agents achieve risk-adjusted performance comparable to, and in some cases exceeding, that of classical Deep RL models with several orders of magnitude more parameters. However, while quantum circuit execution is inherently fast at the hardware level, practical deployment on cloud-based quantum systems introduces substantial latency, making end-to-end runtime currently dominated by infrastructural overhead and limiting practical applicability. Taken together, our results suggest that QRL is theoretically competitive with state-of-the-art classical reinforcement learning and may become practically advantageous as deployment overheads diminish. This positions QRL as a promising paradigm for dynamic decision-making in complex, high-dimensional, and non-stationary environments such as financial markets. The complete codebase is released as open source at: https://github.com/VincentGurgul/qrl-dpo-public

Suggested Citation

  • Vincent Gurgul & Ying Chen & Stefan Lessmann, 2026. "Variational Quantum Circuit-Based Reinforcement Learning for Dynamic Portfolio Optimization," Papers 2601.18811, arXiv.org, revised Jan 2026.
  • Handle: RePEc:arx:papers:2601.18811
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2601.18811
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fred Glover & Gary Kochenberger & Yu Du, 2019. "Quantum Bridge Analytics I: a tutorial on formulating and using QUBO models," 4OR, Springer, vol. 17(4), pages 335-371, December.
    2. Samson Wang & Enrico Fontana & M. Cerezo & Kunal Sharma & Akira Sone & Lukasz Cincio & Patrick J. Coles, 2021. "Noise-induced barren plateaus in variational quantum algorithms," Nature Communications, Nature, vol. 12(1), pages 1-11, December.
    3. Salo, Ahti & Doumpos, Michalis & Liesiö, Juuso & Zopounidis, Constantin, 2024. "Fifty years of portfolio optimization," European Journal of Operational Research, Elsevier, vol. 318(1), pages 1-18.
    4. Francesco Catalano & Laura Nasello & Daniel Guterding, 2024. "Quantum computing approach to realistic ESG-friendly stock portfolios," Papers 2404.02582, arXiv.org.
    5. Francesco Catalano & Laura Nasello & Daniel Guterding, 2024. "Quantum Computing Approach to Realistic ESG-Friendly Stock Portfolios," Risks, MDPI, vol. 12(4), pages 1-20, April.
    6. Esteban Aguilera & Jins de Jong & Frank Phillipson & Skander Taamallah & Mischa Vos, 2024. "Multi-Objective Portfolio Optimization Using a Quantum Annealer," Mathematics, MDPI, vol. 12(9), pages 1-18, April.
    7. Kamila Zaman & Alberto Marchisio & Muhammad Kashif & Muhammad Shafique, 2024. "PO-QA: A Framework for Portfolio Optimization using Quantum Algorithms," Papers 2407.19857, arXiv.org.
    8. Junzheng Yang, 2023. "Apply Deep Reinforcement Learning with Quantum Computing on the Pricing of American Options," World Scientific Book Chapters, in: Faruk Balli (ed.), INTERNET FINANCE AND DIGITAL ECONOMY Advances in Digital Economy and Data Analysis TechnologyThe 2nd International Conference on Internet Finance and , chapter 50, pages 675-694, World Scientific Publishing Co. Pte. Ltd..
    9. Giancarlo Martínez Salirrosas & Jinglun Gao & Arthur Yu & Anish Ravi Verma, 2025. "Market informed portfolio optimization methods with hybrid quantum computing," Review of Financial Economics, John Wiley & Sons, vol. 43(1), pages 62-77, January.
    10. Gary Kochenberger & Jin-Kao Hao & Fred Glover & Mark Lewis & Zhipeng Lü & Haibo Wang & Yang Wang, 2014. "The unconstrained binary quadratic programming problem: a survey," Journal of Combinatorial Optimization, Springer, vol. 28(1), pages 58-81, July.
    11. Vojtěch Havlíček & Antonio D. Córcoles & Kristan Temme & Aram W. Harrow & Abhinav Kandala & Jerry M. Chow & Jay M. Gambetta, 2019. "Supervised learning with quantum-enhanced feature spaces," Nature, Nature, vol. 567(7747), pages 209-212, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ajagekar, Akshay & You, Fengqi, 2022. "Quantum computing and quantum artificial intelligence for renewable and sustainable energy: A emerging prospect towards climate neutrality," Renewable and Sustainable Energy Reviews, Elsevier, vol. 165(C).
    2. Abraham Itzhak Weinberg, 2025. "Hybrid Quantum-Classical Ensemble Learning for S\&P 500 Directional Prediction," Papers 2512.15738, arXiv.org.
    3. Byron Tasseff & Tameem Albash & Zachary Morrell & Marc Vuffray & Andrey Y. Lokhov & Sidhant Misra & Carleton Coffrin, 2024. "On the emerging potential of quantum annealing hardware for combinatorial optimization," Journal of Heuristics, Springer, vol. 30(5), pages 325-358, December.
    4. Marco Antonio Boschetti & Vittorio Maniezzo, 2024. "Contemporary approaches in matheuristics an updated survey," Annals of Operations Research, Springer, vol. 343(2), pages 663-700, December.
    5. Taofeek Adeshina Yusuff & Kenechukwu Francis Iloeje & Sylviastella Favour Peteranaba & Victoria Sharon Akinlolu & Nimotalai Olusola Kassim & Zuraifa Hamidu, 2025. "Creating Quantum-Powered Epidemiological Models Enabling Proactive Responses to Pandemics and Emerging Health Threats," International Journal of Scientific Research and Modern Technology, Prasu Publications, vol. 4(10), pages 39-58.
    6. Fred Glover & Gary Kochenberger & Rick Hennig & Yu Du, 2022. "Quantum bridge analytics I: a tutorial on formulating and using QUBO models," Annals of Operations Research, Springer, vol. 314(1), pages 141-183, July.
    7. Camille Grange & Michael Poss & Eric Bourreau, 2024. "An introduction to variational quantum algorithms for combinatorial optimization problems," Annals of Operations Research, Springer, vol. 343(2), pages 847-884, December.
    8. Dylan Herman & Cody Googin & Xiaoyuan Liu & Alexey Galda & Ilya Safro & Yue Sun & Marco Pistoia & Yuri Alexeev, 2022. "A Survey of Quantum Computing for Finance," Papers 2201.02773, arXiv.org, revised Jun 2022.
    9. Mark W. Lewis & Amit Verma & Todd T. Eckdahl, 2021. "Qfold: a new modeling paradigm for the RNA folding problem," Journal of Heuristics, Springer, vol. 27(4), pages 695-717, August.
    10. Florence Paquette & Tania Belabbas & Emmanuel Hamel & Anne MacKay, 2026. "Pricing Lookback Options on a Quantum Computer," Papers 2604.00389, arXiv.org.
    11. Huang, Chenyi & Zhang, Shibin & Chang, Yan & Yan, Lily, 2024. "Quantum metric learning with fuzzy-informed learning," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 643(C).
    12. Deepak Ranga & Aryan Rana & Sunil Prajapat & Pankaj Kumar & Kranti Kumar & Athanasios V. Vasilakos, 2024. "Quantum Machine Learning: Exploring the Role of Data Encoding Techniques, Challenges, and Future Directions," Mathematics, MDPI, vol. 12(21), pages 1-32, October.
    13. Yves Crama & Michel Grabisch & Silvano Martello, 2022. "Preface," Annals of Operations Research, Springer, vol. 314(1), pages 1-3, July.
    14. Huang, Fangyu & Tan, Xiaoqing & Huang, Rui & Xu, Qingshan, 2022. "Variational convolutional neural networks classifiers," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 605(C).
    15. Yuri Alexeev & Marwa H. Farag & Taylor L. Patti & Mark E. Wolf & Natalia Ares & Alán Aspuru-Guzik & Simon C. Benjamin & Zhenyu Cai & Shuxiang Cao & Christopher Chamberland & Zohim Chandani & Federico , 2025. "Artificial intelligence for quantum computing," Nature Communications, Nature, vol. 16(1), pages 1-19, December.
    16. Singh, Nongmeikapam Brajabidhu & Roy, Arnab & Saha, Anish Kumar, 2024. "Max-flow min-cut theorem in quantum computing," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 649(C).
    17. Aufenanger, Tobias, 2018. "Treatment allocation for linear models," FAU Discussion Papers in Economics 14/2017, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics, revised 2018.
    18. Liyun Su & Dan Li & Dongyang Qiu, 2025. "BLS-QLSTM: a novel hybrid quantum neural network for stock index forecasting," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-15, December.
    19. Michele Samorani & Yang Wang & Yang Wang & Zhipeng Lv & Fred Glover, 2019. "Clustering-driven evolutionary algorithms: an application of path relinking to the quadratic unconstrained binary optimization problem," Journal of Heuristics, Springer, vol. 25(4), pages 629-642, October.
    20. Elies Gil-Fuster & Jens Eisert & Carlos Bravo-Prieto, 2024. "Understanding quantum machine learning also requires rethinking generalization," Nature Communications, Nature, vol. 15(1), pages 1-12, December.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2601.18811. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.