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.
This may be an advantage for Real Madrid, because their situation is still quite comfortable when we see them in the domestic league. We know that now Manchester City is trying hard to defend its title in the Premier League, they have to compete with 2 teams at the same time who have the same points and there is almost no gap between them. With their position like that, Manchester City must focus more on every match they will play in the Champions League as well as in the English League.
This season Real Madrid looks better prepared than last season, yes they are showing something better this season even though they are strengthened by a lot of young players, but they managed to perform well. In my opinion, Manchester City is still slightly superior if we compare the strength of the two teams that will meet. But that's not a big difference at all, so Real Madrid's chances are still very open. And also this competition will take place twice and it is very possible for them to beat each other when playing at their home base.