- Thomas Decker, Mar Gomez, Krystian Gaus
- The challenge:
Stock exchanges need to talk and compare order books as fast as possible. Therefore, the communications between stock exchanges need to be secure, reliable and fast. Currently, errors and opportunities occur during lack of synchronization, not secure communication. Quantum Communication projects perform research on the creation, transmission, interfacing, storage, processing and measurement of optical qubits. Which promise to be faster in pre- and postprocessing and secure during transmission. To provide a quantum network to fulfil all of the above requirements a good measure for entanglement needs to be introduced. “squashed entanglement” or “CMI entanglement” promises to deliver a good measure. Stock exchanges can, with the help of a squashed entangled pair for bipartite quantum system, communicate secure and faster in pre- and postprocessing.
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The challenge:
Arbitrage is the practice of taking advantage of a price difference between two or more markets. One example is cross-currency arbitrage. The problem of arbitrage detection is commonly solved by defining a directed graph in which the nodes are the assets and the edge weights are equal to minus the logarithm of the conversion rate and searching searching for negative cycles. In contrast, the problem of finding the most profitable arbitrage opportunity of arbitrary length is NP-hard, and hence the time complexity of an algorithm solving it to optimality is expected to be exponential. The challenge is to create a QAOA which can be mapped onto an arbitrage cycle and gives the most profitable solution.
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Our solution: https://github.com/ykeuter/arbitrage-qaoa/blob/master/arbitrage-qaoa.ipynb
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Sami Boulebname, Leonhard Neuhaus, Jan Glatz, Cristeam Caiola, Josif Levant, Manfred Rieck, Peter Eder
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The challenge:
The random walk theory suggests that changes in stock prices have the same distribution and are independent of each other, therefore, the past movement or trend of a stock price or market cannot be used to predict its future movement. The theory implies that statistically stock-price fluctuations are independent over time and may be described by a random process-e.g., the tossing of a coin or the selection of a sequence of numbers from a random number table Quantum Walks are the quantum mechanical analogs to classical random walks. Unlike classical objects, particles performing a quantum walk can be in a superposition state and take all possible paths through their environment simultaneously, leading to faster propagation and enhanced sensitivity to initial conditions. These properties make quantum walks interesting to studying future behaviour and movements of financial indicators.
