If Manchester City is considered as favorite team for English Premier League or Champions League then Real Madrid must be considered as favorite team for La Liga and Champions League. There is no doubt that Real Madrid is one of the best club level teams. No other team has won more Champions League titles than Real Madrid. Last season unfortunately real madrid lost but this season real madrid has more chances to win. This season Real Madrid has formed a great team with young players and it is believed that Real Madrid can definitely beat Manchester City in the Champions League this season. The La Liga title is all but assured for Manchester City, all that remains is to do well in the Champions League tournament.
Real Madrid can indeed be calmer when facing matches in the UCL. Because Real Madrid already has an advantage in La Liga and is comfortably in first place with a difference of 8 points at the moment. This is different from Man City, which still has to fight hard in the race for first place in the Premier League. but something similar also happened to Man City last season. Man City last season also struggled in the UCL while competing with Arsenal in the Premier League. And Man City doesn't seem bothered by this.
Apart from that, Man City also has several injured players at the moment. So even if later against Real Madrid all the players have recovered, those who have recovered from injury will not necessarily be able to play as well as before they were injured. But I'm still not sure which team should be the favorite.