This is correct. "I am sorry" can sometimes be used instead of "It is a pity." If you say "It's a pity“ or "it's a shame," you're expressing general disappointment. "I am sorry" makes it more personal, but usually you'd be saying this after someone else has expressed disappointment. You could also say, "I'm disappointed" or "It's sad."

Thank you for your explanation. It was very easy to understand.

Yes.