I think with AAPL, we will see if the emperor has any clothes.  We should retest the recent low of $505 and see if any buyers appear.  Very dicey right now.  The market seems definitely in the "shoot first (sell) and ask questions later" mode.

I found a nice article regarding portfolio construction.  It runs through using correlations to construct a low volatility portfolio which can have a high yield.  In it he uses several instruments I have spoken about.  JNK, BKLN and SPY.  He also uses high grade credits and commodity ETF's as well.

http://seekingalpha.com/article/1047431-a-high-yield-low-risk-income-portfolio-using-uncorrelated-etfs?source=intbrokers_regular

The comments are also instructive as they highlight some of the limitations of this analysis as well as alternatives.  The biggest limitation is that correlations are not stable over time.  In times of crisis, correlations tend to polarize.  For example, all stocks/high yield bonds go toward +1 (with respect to other stocks) while Treasury bonds go to -1 (with respect to stocks) so you lose the correlation benefit.  In such times, it is important to recognize when you have had the "insurable event" i.e. a big down move, then you need to sell the stuff that has gained (treasuries, put options) and buy more of the stuff that has gotten hurt.  Scary, but ultimately the only way to win from volatility.  The trickiest part if to figure what constitutes a big move down.  No easy prescription here for that.  One can look at history as a guide and combine that with instinct.  For me, I start looking when we have a pullback of about 5% in SPY over a short period (a few days).  In addition, I rarely do anything major.  A few percent of adjustment either way rather than taking a big bet.