Hybrid Quantum Neural Networks with Amplitude Encoding: Advancing Recovery Rate Predictions

Recovery rate prediction plays a pivotal role in bond investment strategies, enhancing risk assessment, optimizing portfolio allocation, improving pricing accuracy, and supporting effective credit risk management. However, forecasting faces challenges like high-dimensional features, small sample sizes, and overfitting. We propose a hybrid Quantum Machine Learning model incorporating Parameterized Quantum Circuits (PQC) within a neural network framework. PQCs inherently preserve unitarity, avoiding computationally costly orthogonality constraints, while amplitude encoding enables exponential data compression, reducing qubit requirements logarithmically. Applied to a global dataset of 1,725 observations (1996-2023), our method achieved superior accuracy (RMSE 0.228) compared to classical neural networks (0.246) and quantum models with angle encoding (0.242), with efficient computation times. This work highlights the potential of hybrid quantum-classical architectures in advancing recovery rate forecasting.

HOSSnet: an Efficient Physics-Guided Neural Network for Simulating Crack Propagation

Hybrid Optimization Software Suite (HOSS), which is a combined finite-discrete element method (FDEM), is one of the advanced approaches to simulating high-fidelity fracture and fragmentation processes but the application of pure HOSS simulation is computationally expensive. At the same time, machine learning methods, shown tremendous success in several scientific problems, are increasingly being considered promising alternatives to physics-based models in the scientific domains. Thus, our goal in this work is to build a new data-driven methodology to reconstruct the crack fracture accurately in the spatial and temporal fields. We leverage physical constraints to regularize the fracture propagation in the long-term reconstruction. In addition, we introduce perceptual loss and several extra pure machine learning optimization approaches to improve the reconstruction performance of fracture data further. We demonstrate the effectiveness of our proposed method through both extrapolation and interpolation experiments. The results confirm that our proposed method can reconstruct high-fidelity fracture data over space and time in terms of pixel-wise reconstruction error and structural similarity. Visual comparisons also show promising results in long-term