We present a detailed study of portfolio optimization using different versions of the quantum approximate optimization algorithm (QAOA). For a given list of assets, the portfolio optimization problem is formulated as quadratic binary optimization constrained on the number of assets contained in the portfolio. QAOA has been suggested as a possible candidate for solving this problem (and similar combinatorial optimization problems) more efficiently than classical computers in the case of a sufficiently large number of assets. However, the practical implementation of this algorithm requires a careful consideration of several technical issues, not all of which are discussed in the present literature. The present article intends to fill this gap and thereby provides the reader with a useful guide for applying QAOA to the portfolio optimization problem (and similar problems). In particular, we will discuss several possible choices of the variational form and of different classical algorithms for finding the corresponding optimized parameters. Viewing at the application of QAOA on error-prone NISQ hardware, we also analyse the influence of statistical sampling errors (due to a finite number of shots) and gate and readout errors (due to imperfect quantum hardware). Finally, we define a criterion for distinguishing between ‘easy’ and ‘hard’ instances of the portfolio optimization problem.
While scalable, fully error corrected quantum computing is years or even decades away, there is considerable interest in noisy intermediate-scale quantum computing (NISQ). In this paper, we introduce the ArsoNISQ framework that determines the tolerable error rate of a given quantum algorithm computation, i.e. quantum circuits, and the success probability of the computation given a success criterion and a NISQ computer. ArsoNISQ is based on simulations of quantum circuits subject to errors according to the Pauli error model.ArsoNISQ was evaluated on a set of quantum algorithms that can incur a quantum speedup or are otherwise relevant to NISQ computing. Despite optimistic expectations in recent literature, we did not observe quantum algorithms with intrinsic robustness, i.e. algorithms that tolerate one error on average, in this evaluation. The evaluation demonstrated, however, that the quantum circuit size sets an upper bound for its tolerable error rate and quantified the difference in tolerate error rates for quantum circuits of similar sizes. Thus, the framework can assist quantum algorithm developers in improving their implementation and selecting a suitable NISQ computing platform. Extrapolating the results into the quantum advantage regime suggests that the error rate of larger quantum computers must decrease substantially or active quantum error correction will need to be deployed for most of the evaluated algorithms.
Variational quantum algorithms have been one of the most intensively studied applications for near-term quantum computing applications. The noisy intermediate-scale quantum (NISQ) regime, where small enough algorithms can be run successfully on noisy quantum computers expected during the next 5 years, is driving both a large amount of research work and a significant amount of private sector funding. Therefore, it is important to understand whether variational algorithms are effective at successfully converging to the correct answer in presence of noise. We perform a comprehensive study of the variational quantum eigensolver (VQE) and its individual quantum subroutines. Building on asymptotic bounds, we show through explicit simulation that the VQE algorithm effectively collapses already when single errors occur during a quantum processing call. We discuss the significant implications of this result in the context of being able to run any variational type algorithm without resource expensive error correction protocols.
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