This question usually arrives after someone notices their watch and their ring disagree, or that their HRV chart looks like static. Both observations are correct and neither means the watch is broken.
The metric problem comes first
Before any discussion of sensor quality: the Apple Watch reports SDNN, the standard deviation of intervals between normal heartbeats. Several competing devices report RMSSD, the root mean square of successive differences.
These are different calculations applied to the same underlying heartbeats and they produce different numbers. SDNN values are typically larger. Neither is more correct in general; RMSSD is often preferred for short recordings and is somewhat more focused on parasympathetic activity.
So the single most common reason two devices disagree has nothing to do with accuracy. They are reporting different quantities and labelling them both HRV.
Sampling is the real limitation
Optical sensors at the wrist are genuinely less precise than a chest strap or an ECG, and that gap is real. But for practical purposes it is the second-order problem.
The first-order problem is that the Apple Watch does not sample HRV continuously. It takes opportunistic readings, largely during stillness and during Breathe sessions. That produces two consequences:
Fewer data points. A device sampling continuously through the night can average across hours. A handful of opportunistic readings cannot, so each one carries more noise into the result.
Inconsistent timing. HRV varies enormously across the night and across the day. A reading taken at 2am and a reading taken at 6am are not measuring the same physiological state, so variation inwhen the samples land shows up as variation in the number.
This is why the Apple Watch HRV chart looks spikier than the equivalent from a ring or strap, and it is the main reason it is unhelpful to read individual values.
What the validation work broadly supports
Studies comparing wrist optical HRV against ECG and chest straps generally find reasonable agreement in group averages and in the direction of change, with error on individual readings large enough to matter. The consistent conclusion across this literature is that these devices are suitable for tracking trends within a person and unsuitable for absolute measurement or clinical use.
Which is, conveniently, exactly how a recovery score should use it anyway. Every well-built implementation compares your HRV against your own recent baseline rather than against a reference range, so a consistent bias in the measurement largely cancels out.
What you can actually do about it
Fit the band properly. Snug, not tight, and not sliding around. This is the largest controllable source of bad readings and the most commonly ignored.
Wear it overnight, consistently. More nights means more samples and a baseline that is actually representative.
Read rolling averages. Seven-day averages carry signal. Individual mornings largely do not.
Stop comparing to other people. Between-person HRV variation is so large that it swamps everything, before you even account for device and metric differences.
If your chart is empty rather than noisy, that is a different problem: see Apple Watch HRV not showing. For reading a low value, see why is my HRV low.