Yes, in terms of squad depth, Arsenal and Real Madrid are very different from the players in those clubs Madrid far superior and has bigger chance winning the Champions League title, even Real Madrid has a bigger chance.
Let try to compare it with stronger ones like Bayern Munich, even though they have very high quality new players, but in terms of experience, Real Madrid still the favorite club after manchester City, but for some reason the bookies believe that Bayern Munich has a bigger chance of being in the position second after Manchester City.
Or maybe the reason because real Madrid one of the candidates to hold the Champions League title but has pure strikers, which different from several other clubs.
But still, I would prefer that Arsenal candidate be replaced by Inter Milan, which currently has Martinez, who is considered scoring machine for Inter and I am sure that Arsenal will quickly be eliminated and will be replaced by Inter Milan, which is currently very good condition.
Arsenal may be far behind compared to the strength of Real Madrid this season. I won't even doubt that Real Madrid will be ready to win the title this season. For Arsenal, they are a team that is building their strength and maybe they need time to win the UCL trophy. Apart from that, I see that the season's competition for the title will be dominated by Bayern Munich, Inter Milan, Manchester City and Real Madrid.
Arsenal need some significant overhauls in their squad if they want to become champions. Arteta must have a striker who has the ambition to continue scoring goals because when the team has a productive striker they will be ready to turn things around if they fall behind first. Even so, Arsenal is still quite considered in the Champions League this season. They have to be able to give us a surprise because it would be quite interesting if they were able to make it to the final this season.