Transfer existing old Mac OS System into Parallels Desktop

Hey everyone. Quick question I didn't find on the KB.

I have an old Mac Pro that runs 10.11. alongside some old apps and documents I want to incubate when changing to a new M1 Mac. Sometimes a client comes back and needs something out of an old file or something so I really want to keep everything the way it is at the moment and start fresh on the new system. I could also keep the old Mac Pro around but its starting to act up so a virtual solution might be a better option?

Can I just make a .dmg file of my old system and use that as a starting point for a virtual machine with Parallels?

Thanks in advance!
Ben