The expectation for the genetic Sτ covariance matrices is that the observed covariance matrices will reflect the generating model within only that annotation. Indeed, the causal annotations closely matched their respective population generating covariance matrices and bias was minimal (Supplementary Fig. 10 and Supplementary Table 7). We then analyzed the ratio of the mean SE estimate across the 100 runs over the empirical SE (calculated as the standard deviation of the parameter estimates across the 100 runs). The average ratio of SE estimates was 1.014 across all annotations (Supplementary Fig. 9) and, importantly, was also close to 1 for the causal annotations. Results for 4,459 of the total 5,300 covariance matrices produced negative heritability estimates. This included some of the causal annotations (Supplementary Table 30), but was largely true for the non-causal annotations. Negative heritability estimates are unsurprising for the non-causal annotations as their population generating effect is 0. The z statistics for the Sτ heritabilities and covariances were, on average, smaller relative to the S0 covariance matrices. This is to be expected as the S0 covariance matrices include power gained from variance shared with overlapping annotations.
