Sure it is. You may want to consider doing a couple of purl stitches on each side of the color change so you can keep it consistent. I'm thinking that if you change and do the cable, the edges will pull too much when the cables cross.
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Actually I experimented with this exact idea a while back. Ingrid is quite right in that you'll want to do the color change so that you have a couple of stitches on either side of the cable, otherwise the cable tends to create gaps or holes in the fabric. Otherwise it works quite well.
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Mason
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Yes it is! I've got a book by Debbie Abrahams, "100 More Afghan Squares to Knit" with a pattern in it called "the circus". One of the sections of this afghan has bi-colored cabling. This square is called "Streamers". It's super colorful and the bi-colored cables are on a third color for the background.
Your color choices will make a very nice candy cane affect!
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