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Where the Quantum Lives in D-Wave Hybrid Portfolio Optimization: An Operational Decomposition Audit

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  • Luis Lozano

Abstract

We audit the operational decomposition of D-Wave's hybrid quantum-classical portfolio-optimization service on cardinality-constrained mean-variance-turnover instances spanning N=10 to 640, with the constraint-native LeapHybridCQM interface, the penalty-encoded LeapHybridBQM interface, and Gurobi MIQP and simulated-annealing classical anchors. We report all three SDK timing fields (t_run, t_charge, t_QPU) and define a candidate four-metric audit protocol for hybrid quantum-classical solvers. Three findings. First, the LeapHybridCQM service matches Gurobi's proven optimum on all 54 head-to-head instances at N

Suggested Citation

  • Luis Lozano, 2026. "Where the Quantum Lives in D-Wave Hybrid Portfolio Optimization: An Operational Decomposition Audit," Papers 2605.17623, arXiv.org, revised Jun 2026.
    • Handle: RePEc:arx:papers:2605.17623
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    References listed on IDEAS

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    1. Victor DeMiguel & Lorenzo Garlappi & Raman Uppal, 2009. "Optimal Versus Naive Diversification: How Inefficient is the 1-N Portfolio Strategy?," The Review of Financial Studies, Society for Financial Studies, vol. 22(5), pages 1915-1953, May.
    2. Luis Lozano, 2026. "A Penalty-Free Pipeline for Direct Quantum-Annealer Portfolio Optimization," Papers 2605.17628, arXiv.org, revised May 2026.
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