Some Canadian stocks have the potential to deliver huge long-term gains, but others can expose investors to intense volatility and test their patience in the short run. That’s especially true in sectors like energy and real estate, where market conditions can shift quickly based on commodity prices, interest rates, and macroeconomic sentiments.
But volatility alone doesn’t always make a stock bad. In fact, some of the market’s best long-term performers have gone through periods of major swings before rewarding patient Foolish investors. That’s why investors need to understand the risks carefully while focusing on companies with strong fundamentals and long-term growth potential.
In this article, I’ll highlight two Canadian stocks that I think may seriously shake up a $100,000 portfolio in the short term, but could still reward long-term investors in a big way if they are willing to handle some turbulence.
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Peyto Exploration & Development stock
For investors willing to take on a bit more uncertainty in exchange for potential upside, Peyto Exploration & Development (TSX:PEY) is a name that can bring both sharp swings and strong returns depending on how the energy market performs. It’s one of Canada’s top natural gas producers, focused on operations in Alberta’s deep basin.
After climbing nearly 40% over the last year, PEY stock currently trades at $25.10 per share with a market cap of $5.1 billion. It also offers monthly dividends, with an annualized yield of 5.1% at the current price.
In the fourth quarter alone, the company generated $245 million in funds from operations (FFO) alongside $102 million in free funds flow. For the full year 2025, annual FFO reached $860.5 million while free funds flow totaled $375.2 million.
One reason behind that strong performance has been Peyto’s disciplined hedging strategy. Even though natural gas prices remained weak during much of 2025, the company realized significantly stronger pricing through its diversification and hedging programs.
Peyto also continues benefiting from strong production growth and efficient infrastructure operations. Its owned-and-operated infrastructure system can process up to 1.5 billion cubic feet per day, helping lower operating costs and support future expansion opportunities.
Still, investors should remember that energy stocks like Peyto can remain highly volatile due to changing commodity prices and market conditions. While its long-term outlook appears promising, short-term swings could test investor confidence.
Nexus Industrial REIT stock
Nexus Industrial REIT (TSX:NXR.UN) is another stock that could bring both opportunity and huge short-term volatility to a portfolio. This Oakville-based real estate investment trust (REIT) focuses on owning industrial properties across Canada and has been benefiting from strong demand for logistics and warehouse space.
Its stock recently closed at $8.06 per unit with a market cap of roughly $782 million. Over the last year, the stock has climbed more than 15%. It also offers attractive monthly dividends, with its yield hovering around 8% at the current market price.
In its most recent quarter, which ended in December, Nexus generated net profit of $30.6 million, backed by net operating income of $33 million and fair value gains of $20.3 million. Its annual NOI also increased 2.8% year over year with the help of growth in its industrial same-property performance and recently completed development projects.
Nexus has also been actively expanding its portfolio through acquisitions and new developments. Last year, the REIT completed a 325,000-square-foot expansion project in St. Thomas, Ontario, along with a 115,000-square-foot industrial development in Calgary. Together, these projects could contribute roughly $6.6 million in annual stabilized NOI.
Its transition into a pure-play industrial REIT could continue supporting long-term growth. However, smaller REITs could sometimes see heightened price volatility, especially during periods of elevated interest rates or changing real estate market conditions.
