Observations.
AO and ISST are very close in amplitude before 1997 but a notable adjustment to phase of 6 months was needed.
>1997 there is still enough resemblance to align the two but they are now notably different.
Large dip on AO at end of 2010 is notable and uncharacteristic difference between the two.
hadISST shifted up by its "neutral" value I found here :
http://forum.arctic-sea-ice.net/index.php/topic,234.0.htmlPhase lag of AO was quite considerable where there was a lot of thick ice. Probably logical, ice slow to transmit heat , less open water etc.
Slight reversal in final section despite ice remaining thin and much open water. Is this related to flattening of rate of change, why?
Poor correlation pre-1980 seems surprising in view of the very tight correlation later. Perhaps this is due to both records being less accurate in the pre-satellite era.
Without the vertical offset of the last two sections AO stays centred on the line.