The Rojiblancos have not lost a Liga game at home this season but the Argentine says that Carlo Ancelotti's men are clear favourites to win this weekend's crunch clash
The Rojiblancos currently sit third in La Liga, just three points behind Carlo Ancelotti's table-toppers, and have not lost a home game in the league so far this season.
However, Simeone insists that Madrid, who completely thrashed Atleti 5-0 on aggregate in the Copa del Rey last month and are coming into this game on the back of a 6-1 Champions League demolition of Schalke, are the obvious favourites to triumph on Sunday.
“They put in a great game [in Gelsenkirchen] and they’ll be visiting the Vicente Calderon after an emphatic win," the Argentine told reporters on Saturday.
"They are the league leaders and they’re hitting form. Right now, Madrid are the most feared side in Europe.
“The favourites are the ones who are top of the table, so it’s only logical that the team which is top of the standings is the better side.
"You can say as many nice words about us as you like but deeds count, not words."
Simeone also pointed out that Los Blancos have come a long way since Atletico triumphed 1-0 at the Santiago Bernabeu back in September.
“The best thing about Real Madrid is how they play as a unit," the former midfield ace mused. "They have some fantastic individual players who reinforce a side which is very well-balanced.
"If we play with intensity and focus, we’ll be in with a chance. But we will be meeting one of our main rivals - one who is in great form at the moment and who, since November or December, have really blossomed."