A small group of hedge fund managers have beat their struggling peers and the anemic stock market by betting against stocks. John Burbank’s Passport Capital, Lee Ainslie’s Maverick Capital, Paul Hudson’s Glade Brook Capital Partners and Adam Bernstein’s Pagoda Asset Management have made bets that individual stocks would fall, known as short trades, that have driven their funds’ performance in recent months. The average stock-picking hedge fund, as represented by the Absolute Return U.S. Equity Index, gained just 0.04 percent from the beginning of January through October. That’s less than the Standard & Poor’s 500 index’s gain of 2.7 percent,...