The regulations on visibility of the lights also determines the position aboard.
The lights are to be visible from directly abeam to directly ahead, for a total arc of 112.5º. This is important, as observers are supposed to get a visual clue from the occlusion of the sidelights as the vessel's midline passes by. The visibility of sailing vessels is supposed to be maintaind by intermittently displaying a light on the aftermost sail in use aboard.
So, if you saw a red light in front of you, and it vanishes, either it has passed beyond you course, or over the horizon. The illumination of a spanker or mizzen staysail would then confim that. If you see a green light join the red, it gets a lot more exciting, as that means the other vessel has just turned towards you--always exciting, and not in a good way in the full dark.
Now, I'me trying to remember the discussion from an old-enough copy of Knight's that the oil lamps were to be visible for a nautical mile; later, with higher ship speeds and electrical lamps, sidlelight visibility was increased to 3 nm, and mastheads to 5nm. But, I could be misremembering very old discussions of RoR from very long ago.
And, for best appearance, it's good to paint the sideboards a slightly different red than the lamp body (which is finisky work even at 1/96, but it does help it not look like some odd reed and green dod-dads tacked on your ship, too.