The watchOS Compass app shows you the direction your Apple Watch is pointing, your current location, and the elevation. You can also create Compass Waypoints as you go and retrace your steps with Backtrack — with some caveats.
To wit: the Compass app is available on Apple Watch Series 5 and later, and Apple Watch SE. The Compass Waypoints and Backtrack features, however, are available only with watchOS 9 on Apple Watch Series 6 and later, Apple Watch SE, and Apple Watch Ultra.
Also note that The presence of magnets can affect the accuracy of any compass sensor. Apple’s Leather Link, Leather Loop, Milanese Loop, and earlier Sport Loop watch bands use magnets or magnetic material that might interfere with the Apple Watch compass. The compass isn’t affected by Sport Loop bands introduced in September 2019 or later, or any version of the Sport Band.
How to find your direction, elevation, incline, and coordinates
When you open Compass, the app shows you the direction that the top of your watch is pointing1 and your bearing at the center of the compass dial.
Rotate the Digital Crown up to see your elevation, incline, and coordinates3 in the inner ring of the compass. You can also see this information by tapping the menu button.
How to set your bearing
° Open the Compass app on your Apple Watch.
° Tap the menu button at the top left.
° Scroll down, then tap Bearing.
° Use the Digital Crown to adjust the bearing.
° Tap Done.
After you set a bearing, the black marks on the outer edge of the compass turn red to show how far off your bearing you are.
To clear the bearing, tap the menu button, scroll down, then tap Clear Bearing.
(This how-to is based on my experiences and info on Apple’s support pages — where the images sometimes come from.)