An electronic device is provided. The electronic device includes a memory and at least one processor functionally connected with the memory, wherein the at least one processor may be configured to generate a first signal by modulating a phase of a default signal using a first code corresponding to a first magnetic field generator connected with the electronic device, control the first magnetic field generator connected with the electronic device to radiate a magnetic field corresponding to the first signal, receive a signal from at least one sensor connected with the electronic device, identify a second signal corresponding to the first signal from the signal, using the first code, and determine at least one of a position or a direction of the at least one sensor based on the second signal.