Consider the following two statements regarding the Mandala theory in Kautilya's Arthashastra:

1. The Mandala theory suggests that a ruler should always regard his immediate neighbor as a friend and the neighbor's neighbor as an enemy.
2. In the Mandala theory, the concept of the 'enemy's enemy' being a friend is fundamental, indicating that a ruler should build alliances based on shared adversaries.

Which of the above statements is/are correct?