The Kernel Density tool calculates the density of features in a neighborhood around those features.

Kernel Density calculates the density of point features around each output raster cell. Conceptually, a smoothly curved surface is fitted over each point. The surface value is highest at the location of the point and diminishes with increasing distance from the point, reaching zero at the Search radius distance from the point. Only a circular neighborhood is possible. The volume under the surface equals the Population field value for the point, or 1 if NONE is specified. The density at each output raster cell is calculated by adding the values of all the kernel surfaces where they overlay the raster cell center.