Copula-based Risk Aggregation with Trapped Ion Quantum Computers

Understand

Copulas are mathematical tools for modeling joint probability distributions.

• Since copulas enable one to conveniently treat the marginal distribution of each variable and the interdependencies among variables separately, in the past 60 years they have become an essential analysis tool on classical computers in various fields ranging from quantitative finance and civil engineering to signal processing and medicine.
• The recent finding that copulas can be expressed as maximally entangled quantum states has revealed a promising approach to practical quantum advantages: performing tasks faster, requiring less memory, or, as we show, yielding better predictions.
• Studying the scalability of this quantum approach as both the precision and the number of modeled variables increase is crucial for its adoption in real-world applications.