Read MoreTime for insurance on an 'unsustainable' market?
Take volatility arbitrage funds, for example. As their strategy name suggests, they are supposed to profit when the market swings up and down, just like it's done in October.
But many funds appear to have faltered, including the BlueMountain Equity Alternatives Fund (down 0.64 percent for the month through Oct. 10 and 2.68 percent for the year); Capstone Vol Offshore (about flat through Oct. 10 and up 0.60 percent in 2014); and Dominicé & Co.'s Cassiopeia Fund (up just 0.03 percent through Oct. 10 and down 3.80 percent in 2014).
Spokesmen for BlueMountain and Capstone declined to comment. Dominicé did not respond to a request for comment.
Another strategy that has underperformed so far this month is market neutral, which seek to evenly weight bets for and against the value of stocks and often attract managers with a knack for short-selling. Despite their reputation as a better protector of capital in down markets, such funds are up just 0.27 percent through Oct. 15, according to a Bank of America Merrill Lynch report.
Examples include Carlson Capital's Black Diamond Relative Value Fund (down 1.11 percent for the month through Oct. 10 and up 3.41 percent in 2014), according to a report from HSBC's alternative investment group, and the Marshall Wace TOPS UCITS fund (down 0.09 percent through Oct. 16 and up 1.51 percent for the year), according to firm materials. Both firms didn't respond to requests for comment.
Even if some shorts have worked for market-neutral managers, they appear to have been outweighed by losing longs.
"Unfortunately I am getting whacked in October like everyone else," said Scott Fearon, founder of $100 million Crown Capital Management.
Fearon—a previously reclusive manager who recently stepped into the public eye for the first time by publishing a book on shorting overvalued stocks—said his fund is down about 2 percent this month. Crown's shorts are up, but they have been outweighed by losing longs such as manufacturing company Trinity Industries, which was hurt by a selloff of energy sector companies.
Fearon's fund is still slightly positive for the year and has produced annualized returns of 11.4 percent net of fees from 1991 to 2013. Today, he's still convinced some parts of the market are overvalued.
"On a (price-to-earnings) basis the S&P 500 is roughly fairly valued," Fearon said. "But there is a glaring bubble in some sectors, including social media, biotech and alternative energy."