I have a set of $n$ measurements of $p$ variables $\xi_i$. I am interested in the inverse covariance or precision matrix $P$ of the variables, but because $p \gg n$ and because of limited storage ($p$ can be on the order of several 100,000), I would like to constrain the precision matrix to a given sparsity pattern.
In particular, the variables are associated with positions $(x_i, y_i, z_i)$, and I would like the precision matrix to have non-zero entries only for pairs of variables $(i, j)$ with $$ \sqrt{ (x_i - x_j)^2 + (y_i - y_j)^2 + (z_i - z_j)^2 } <= r. $$
Is there a method to estimate such a precision matrix with a given sparsity pattern? I'm aware of the graphical lasso and other methods of sparse precision estimation, but as far as I know they infer the sparsity pattern from the data.
As a second part of the question, would it be possible to apply the same sparsity constraint instead to a matrix $W$ of the same size as $P$, such that $P = W' W$? This matrix would be used to "whiten" or decorrelate the variables.