I have to admit my statistics skills are not amazing however, i'm very interested in improving my knowledge. I've been trying to work out a way to see if there is a correlation between the number of troops in iraq and Afghanistan (BOG) and the price of an index that only deals in companies with significant numbers of military contracts. It's something i've been interested in for a while and i've been wondering if anything might come of it (most likely not). However, i want to understand how i would go about analysing any relationship between the two. Especially since the data is only monthly.

I've done some reading regarding war risk and how one could analyse it and i've see a few heteroskedastic methods used including GARCH models in the following papers:

Heteroskedasticity in Stock Return Data: Volume versus GARCH Effects

What Do Financial Markets Think of War in Iraq?.

THE ECONOMIC CONSEQUENCES OF A WAR WITH IRAQ.

The Effect of War Risk On U.S. Financial Markets

However these are all concerned in general with trying to analyse news events and seeing if they have any affect on stock prices.

Basically i was wondering if anyone could provide me with a few insights into how i should go about analysing any relationship between the two. I've already done some cross correlation between the two but i'm not sure what to do with it at the moment.

Sorry if this seems really vague i was just hoping for some help / points so i can start to explore stats with a topic i'm interested in.

Thanks in advance and i look forward to hearing from you guys. Also i have some data if anyone wants to have a look at what i can play with.