Your favorite is what you like best. Your room is probably painted your favorite color, and the folders you carry to school are probably that color too.
In a competition, the favorite is the one considered likely to win. If you bet on the favorite in a horse race, you're betting on the horse lots of other people think will win. The opposite of the favorite is the dark horse, or the underdog, or the long shot. You may have a favorite recipe, a favorite Web site, a favorite pastime, a favorite anything.