Abstract: Techniques are disclosed for performing localization of a handheld device with respect to a wearable device. At least one sensor mounted to the handheld device, such as an inertial measurement unit (IMU), may obtain handheld data indicative of movement of the handheld device with respect to the world. An imaging device mounted to either the handheld device or the wearable device may capture a fiducial image containing a number of fiducials affixed to the other device. The number of fiducials contained in the image are determined. Based on the number of fiducials, at least one of a position and an orientation of the handheld device with respect to the wearable device are updated based on the image and the handheld data in accordance with a first operating state, a second operating state, or a third operating state.