Unfortunately, they are based on *very* simplistic data. The number just represents how well you hit your own goal (bedtime, duration and number of wakeups). Doesn't take any actual health data into consideration.

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what kind of health data?

things like blood pressure or heart rate for example.

I mean... the watch can measure REM sleep vs deep sleep somehow, surely taking heart rate and wrist movement and maybe breathing sounds into consideration, but none of this goes into the sleep score.