Bulls are technically color blind and don't particularly see colors. The matador's cape can in fact be any color.
The main reason why bulls charge towards a bull fighter is that they hate the movements of the fabric. They find it extremely irritating for some reason which makes them want to attack it. The color of the cape is irrelevant.
But if bulls can't see red, why is the cape's color always red?
The answer is simply is to hide as much as possible blood stains as to make the sport (if you can call it so) less gruesome and violent than it is. Imagine if the cape's color was white!