Capes

You wear a cape for its effect rather than its armour. Every cape except the Ashen Cape and the Deep North capes gives 1 armour at quality 1. What you actually pick one for is frost resistance, fall damage or carry weight.

Protection

Pros

Frost resistance lives here and nowhere else among the head, chest and leg slots. The Wolf Fur Cape, Lox Cape, Feather Cape, Asksvin Cloak and Ashen Cape all halve it, which counters Freezing as long as you are not Wet.
The effects are movement abilities rather than stats. The Feather Cape removes 100% of fall damage and caps your fall speed at 5 m/s, and the Asksvin Cloak grants Wind run and takes 15% off a dodge roll.
The Ashen Cape is one of the 12-armour capes, rising to 18, and it takes 10% off attack stamina and 20% off block stamina too.
A Lox Cape costs 6 Lox Pelt and 2 Silver, the cheapest frost resistance in the game.

Cons

You get one armour per level. Most of them are worth 4 armour fully upgraded, against 44 for a Flametal Helmet.
You carry 4.0 weight for that 4 armour, the worst weight-to-armour ratio of any slot.
The Feather Cape pays for its fall immunity with 2x fire damage taken, which is a death sentence in the Ashlands.
Being Wet cancels the frost resistance, so rain or a swim undoes the cape you climbed the Mountain for.

Builds

Pick the effect, not the number. Outside the 12-armour capes, the armour gap between the best and worst cape is 3 points, so the slot comes down entirely to what the cape does: frost resistance for the Mountain, fall immunity for the Mistlands, stamina for the Ashlands.

The exception is the Troll Hide Cape, which you wear for the Troll Set's +15 Sneaking rather than for anything of its own.

Capes are made at the Workbench, the Galdr table and the Black forge.

Best Capes

Build	Name	Image	Stats
Most armour	Ashen Cape		12 armour at quality 1
Longest lasting	Feather Cape		1600 durability at quality 4

Notes

Every cape gains 1 armor with each upgrade, except the Ashen Cape, which gains 2.
A cape's armor adds to the helmet, chest and leg armor to make up the total armor rating.
A cape's frost resistance only prevents Freezing while the wearer stays dry. Getting Wet cancels it.
Upgrading a piece that is being worn takes it off, so check the gear before heading back out.