"Caldera Colorada" means "Red Cauldron". They didn't spend a lot of time thinking of a name, did they? ;)
But why should they? There are so many mountains around called Rote Spitze or Rote Wand, also Rotwand where nobody thought either.
But doesn't colorada mean colourful?
Nope, "colorada" means red. But you are close enough in your guess, as colourful can be translated by "coloreada". :)