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The correlation between Freeport-McMoRan (NYSE:FCX) and copper seems to be breaking down. In a post from last year, I made some projections on where FCX might trade with respect to copper prices, but the relationship between the metal and the miner, while strong, isn't as strong as last year.

Here's a look at the price of FCX against copper going back one year:

Based on this chart, I might have expected FCX not to trade much lower than $40 per share, with copper at around $3.85. But a chart based on only the last six months shows less of a correlation:

There's now more variance and a much looser relationship between copper and Freeport's stock price. If you look at this on a rolling basis, you can see this steep drop in correlation:

The purple line shows the 30-day correlation between FCX and copper.

The lesson here is that miners aren't metals. Metals trade based on the marginal demand and the marginal cost to supply it. Mining companies add another layer of risk - as Vatalyst pointed out well in a post last week:

Freeport-McMoRan is a perfect example of the risks and rewards that engulf the mining industry in many parts of the world. With large operations (like its Grasberg mine in Indonesia) found in some of the more unstable countries in the world and the relentless danger of cave-ins, this is not a business without risks.

I agree. In late February, FCX suspended operations at its mine in Indonesia, but according to Reuters, work has resumed.

So is the risk worth the potential reward? I think it is. While I'm disappointed in the stock's performance year to date, it does still pay $1 per share in dividends, and also offers exposure to gold, molybdenum, and other strategic metals.

Disclosure: I am long FCX.