That delivered a 30 percent return in 2016 for the London-based Runestone Capital Fund, which crunched more than 700 variables to develop a quantitative model for trading U.S. equity index volatility. “We trade with a one-day horizon as predicting volatility long term is completely random,” Rune Madsen, founder and portfolio manager of the $17 million fund, said in an interview on Monday. The absolute return fund, which targets an average annual return of more than 20 percent, is always directional, making bets that one-day volatility will either rise or fall, according to Madsen. The return for 2016 was 30 percent with a maximum...