Why not both?

# grep -b -A10 pattern file
perl -ne '$c=11if/pattern/;$d=$c<11?"-":":";$t||=0;$c--,print"$t$d$_"i
+f$c;$t=tell' file
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Update: This produces the same output as GNU diff which prints --\n between groups farther than the -A amount of lines apart.

perl -lne 'if(/pattern/){print"--"if!$c&&$t;$c=11};$d=$c<11?"-":":";$t
+||=0;$c--,print"$t$d$_"if$c;$t=tell' file
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