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Hedging basically a tool to mitigate a risk by investing in one or more than one assets, whereas pooling is a set of assets to diversify risk within the sets of assets.
Hedging means that an investor can mitigate the risk of investment price declining by offsetting position, for example buying put option . While Pooling of risks means diversification where he can spread out his investments into multiple baskets.
Hedging is as the term suggests is the use of certain processes or financial tools in order to protect oneself from financial risks arising due to adverse movements to the value of resources which are expected to arrive or depart from the company.
Pooling of risks on the other hand is a much narrower term used to describe the concept behind how the modern insurance industry operates. Pooling of risks seeks to bring together the risks faced by many into one basket, charge a premium from the many and expect to compensate those very few who will actually end up facing the risk. Pooling of risks therefore also contributes to the principle of hedging as insurance in itself is a form of hedging.
Hedging of risk means using market instruments to offset the risk in negative price movements.ie it is an investment to reduce the risk. where as risk pooling means being together or form a pool to reduce the catastrophic risks by insurance companies
