the odds the for Arsenal vs Real Madrid match are indeed interesting, with Arsenal at 2.38 and Real Madrid at 3.05, it's clear that bookies are favoured an Arsenal can win however as you mentioned the odds might not just as equal as expected, considering how both teams have performed recently, Real Madrid recent form has been Inconsistent, which might have contributed to thier slightly higher odds, on the other hand Arsenals strong performance, including thier 2-2 draw against PSG Eindhoven might have influenced the bookies to favour them.
The bookmakers are not always right either and could be baiting people into betting on Arsenal, despite the fact that Real Madrid are a team that has been very successful in the Champions League. And if you are saying that Real Madrid’s form has been inconsistent of late, you need to look at the last five games that Real Madrid have played, in which they have only lost once by a narrow margin to Atletico Madrid. The rest were wins with one draw and I think that is not a bad result considering that Real Madrid faced a slightly stronger team than Arsenal, such as PSV Eindhoven.