Paint the inside of the shoe box with different shades of blue using acrylic paint. Allow the paint to dry for 30 minutes.
Press air-drying clay into one side of the shoe box that you want to be the bottom of the diorama. Shape the clay with hills and valleys to resemble an ocean floor. Allow the clay to dry for one hour.
Crumple small pieces of newspaper into conical shapes, and tape them onto the clay ocean floor. These will be the coral reefs. Add on as many as you prefer.
Cover the entire clay floor with craft glue, and sprinkle sand over the glued surface. Allow the glue to dry for one hour, then empty out the excess sand.
Paint the coral reefs using textured paint. The textured paint will make the newspaper look like coral. Use vibrant colors to resemble a real coral reef. Allow the paint to dry for 30 minutes.
Apply a thin coat of craft glue onto the back and sides of the diorama, and press blue cellophane against the glued area. This will resemble water. Allow the glue to dry for 30 minutes.
Tape 4-inch nylon strings onto the top side of the diorama, and tape the other ends onto plastic ocean-themed figurines, such as fish, starfish or dolphins.