Standardize the Dow column (i. e., for each element in the Dow column, subtract the Dow mean and divide by the Dow standard deviation). Save the standardized Dow values in a new column labeled z1. Repeat this process for the S& P 500 column, and store the standardized data in z2. You may choose to use different labels, but for the remainder of this chapter, z1 and z2 will refer to the standardized Dow and S& P, respectively.
a. Create time series plots of the standardized Dow and S&P, z1 and z2. Both time series should be on the same graph.
b. Do you see similar patterns in z1 and z2 (i. e., are the variables correlated)? Describe why you would or would not expect stock market indices to be correlated.
c. Explain why the time series plot using z1 and z2 is more useful for comparing patterns in the stock market than the time series plot created in Question 1.