Red is worse from what I recall, green is better, the more the better

I'd say it's the likelihood of hurting an enemy, depending on the distance. The colours on the chart are the same as you'd get when giving "fire" command. Therefore, if line of sight when issuing attack command was green, you have a 1/2 chance of hitting the enemy. If the line was yellow, the odds fall as low as to 1/8. Obviously, these functions are different whether you attack an infantry unit or a tank.