Abstract: Conceiving the origins of stock market fluctuation has been a topic of considerable interest long ago to both policy makers as well as market practitioners. In both cases, forecasting stock market fluctuation is considered an immense challenge but also a principal instrument to manage the risks confronted by these parties. Investment decision is based on various factors and criteria that should be interpreted and analyzed before adopting any investment decision whether to buy or sale the specifies securities or may your decision is to hold the security concerned. In this study, we are going to study sector specific index (Financial, Industrial and Services) which bear a major correlation and impact on Amman Stock Exchange Index-Aggregate index (ASE-Index). The study, will attempt to assist and direct investors in building-up their portfolio based on the degree of correlation and impact of sector specific index and the aggregate market index. The main conclusion of the research that financial sector securities play a major role in reducing the portfolio risks as ii is adversely correlated with ASE general index while services and industrial sector are positively correlated with the general index which ultimately means that it will increase the portfolio’s risk level.