TL;DR: it's a mail bag and it's there to identify it as 'friendly' to planes.
I thought for sure it was a captured Nazi flag, but finding the same thing on other tanks suggests otherwise. What follows is highly speculative about what it is and why it's there but IMO, it draws reasonable correlations; history buffs might know better.
Mail bag:
~1h:19m :
If you click the picture you can see what looks like two strings that act as handles or closers. Those may just be the straps holding it down, but both of our pictures have what seems like the rounded bottom that would be sown into 'waterproof' bags of that era.
I had difficulty finding a US mailbag in red, perhaps this is a British thing?
There's plenty of other shots that show most of the other tanks having one. They're usually strapped on a little more haphazardly, though. I guess they got tired of digging it out every time they passed a grunt; there it is, bro. as I doubt the field manual says, "strap red bag on back of tank"...
Although now I speculate as to whether it was a battlefield decision to hang a don't-run-into-me flag on the back, or perhaps it means don't-bomb-me-yo.
At the range, a red flag means a miss:
He had Maggie's drawers..you know what that means...means he couldn't shoot. –JFK
Though I can find no military suggestion of this being protocol, it seems reasonable because as the war went on, it became as likely to be bombed mistakenly than otherwise (especially considering it's almost always strapped to the top of the cargo).
Improved technology to assist in identifying friendly forces is also an ongoing response to Friendly Fire problems. From the earliest days of warfare, identification systems were visual... –Wiki